Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — WALES

Small Firms (Credit Restrictions)

Mr. Anderson: asked the Secretary of State for Wales what representations he has received about the effects on small firms in Wales of the restriction on bank credit; and what action he proposes to take.

The Under-Secretary of State for Wales (Mr. Ifor Davies): None, Sir. This is a matter for my right hon. Friend the Chancellor of the Exchequer.

Mr. Anderson: Does my hon. Friend see any connection between the present difficulties of small firms in Wales and the proposals for a national bank, which some argue could lead to more flexible credit procedures.

Mr. Davies: The situation with regard to small firms is naturally one of the matters being taken into account by the Finance Panel of the Welsh Council during its current study of the availability of finance in Wales.

Mr. Gibson-Watt: The hon. Gentleman will know that, with regard to the restriction of credit, the Bank of England issued a statement on 23rd May last year showing the various priorities for lending, which included agriculture. Why did it not include a reference to tourism? In view of the importance of tourism to the economy of Wales, will his right hon. Friend take this up with the Bank of England?

Mr. Davies: The importance of tourism is fully appreciated on this side of the House. That is why the Government

have their very interesting and important new proposals about the establishment of a new Welsh Tourist Board. The assistance given to the Tourist Board is recognised, but I will take note of the hon. Gentleman's remarks and follow this up.

Prince of Wales (Investiture)

Mr. Peter M. Jackson: asked the Secretary of State for Wales whether he will now give an estimate of the cost to public funds of the arrangements to bring Ambassadors and Commonwealth representatives to the Investiture of the Prince of Wales.

The Secretary of State for Wales (Mr. George Thomas): The cost to public funds of taking Ambassadors and Commonwealth representatives to the Investiture ceremony is likely to be about £4,000.

Mr. Jackson: Would my right hon. Friend not agree that that is a very large sum of money? Is it within the allocation of £200,000 which I understand my right hon. Friend has set as the limit of the expenditure for the ceremony? Would he also say whether the coaches and trains which are bringing other so-called Welsh dignitaries to attend the ceremony are also to be paid for out of public funds?

Mr. Thomas: The £4,000 is within the ceiling of the £200,000. I have the impression that if I said that the sum was £20 some people would say that it was too high a figure. This amount is quite realistic. As for the expenses of other people, I do not know of any special trains laid on for them.

Mr. Gwynfor Evans: Does the £200,000 include the cost of the wages of the hundreds of police who will be involved and the 2,500 soldiers and the crews of the naval vessels who will be there to add to the military nature of the occasion?

Mr. Thomas: I understand the concern of the hon. Member, who is neutral about the Investiture—neither for it nor against it. The wages to which he refers will fall to be met by the responsible Departments.

Mr. Emrys Hughes: asked the Secretary of State for Wales how many of the £5 5s. and £10 10s. seats at the Investiture at Caernarvon have been sold up to date; what steps he is taking to prevent speculation in the tickets; and how many have


been allocated to old-age pensioners who were present at the last Investiture.

Mr. George Thomas: The seats to which my hon. Friend refers are those outside the Castle, which are on sale through the Wales Tourist Board. All the £5 5s. seats and 2,000 of the £10 10s. seats have been sold. It is a matter for those buying the seats to act responsibly to prevent any speculation. I have no information on how many of these seats have been sold to old-age pensioners.

Mr. Hughes: But is my right hon. Friend aware that the old-age pensioners have a grievance since many of the 10-guinea seats have already been taken up by the unemployed? Would it not be a gracious act on his part to send a special invitation and a complimentary 10-guinea ticket to that very distinguished and popular old-age pensioner, the Duke of Windsor, who played such a prominent part in the last Investiture?

Mr. Thomas: I am sure that the House and the people of Wales will be interested to know that my hon. Friend is now anxious to see that there is a good attendance at the Investiture.

Sir G. Nabarro: Does the right hon. Gentleman recall that I asked him several months ago what special arrangements he would make for English Members of Parliament, myself included, who may wish to attend the Investiture, and in my case will wish to attend the Investiture with my wife? Will facilities be specially available for Members of the House of Commons?

Mr. Thomas: It is understandable that, in view of the fact that the central figure of the Investiture is the Prince of Wales, whose superb broadcast the House, I know, will have apreciated, hon. Members should want to attend—[Interruption.] It was a superb broadcast; let hon. Members make as much noise as they like. Arrangements have been made through the usual channels for representatives from both sides of the House to attend. I advise the hon. Member, if he is still on speaking terms, to talk to his Chief Whip.

Mr. Emrys Hughes: asked the Secretary of State for Wales how many letters and representations he has received calling for increased expenditure on the Investiture of the Prince of Wales.

Mr. George Thomas: I have received no such letters or representations.

Mr. Emrys Hughes: In view of the statement that there is massive support for the Investiture in Wales, how does the Secretary of State explain that there is no offer of financial assistance? Is he aware that those in the licensed trade are opening the pubs for several hours? Does he think that they should come forward with a magnificent contribution?

Mr. Thomas: Far be it from me to advocate the cause of the licensed trade, but, of course, its members are taking this action because they expect a very popular response. The reason why I have not had these letters, I am sure, is that the people of Wales have every confidence that we shall manage efficiently with a dignified and colourful ceremony within the figure arranged.

Mr. Gibson-Watt: Will the right hon. Gentleman inform his hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) that if he bangs on much longer on this subject he will be in grave danger of being shut up in a dustbin?

House Purchase (Bank Rate)

Mr. Gower: asked the Secretary of State for Wales whether, in view of the further increase in Bank Rate, he has considered the position of housing purchasers in Wales; what discussions he has had with building societies and local authorities; and what decisions he has reached.

Mr. Ifor Davies: My right hon. Friend has had no recent discussions with the building societies or local authorities on this subject; but both he and my right hon. Friend the Minister of Housing and Local Government maintain close contact with the Building Societies Association.

Mr. Gower: Will the Minister take account of the fact that local authorities such as Port Talbot, Ebbw Vale and Pontypridd are paying 8¾ per cent. interest to the Public Works Loan Board for money for house purchase and that the Principality Building Society has forecast the inevitability of an increase in interest rates by building societies? Is it not a fact that house purchasers in Wales, as elsewhere, face a very grim


prospect in the months, and possibly years, ahead?

Mr. Davies: Our record in housing is a very proud one and does not indicate any difficulties. I should point out that house purchasers are being helped by the tax reliefs on what they pay.

Road Improvements (Barry)

Mr. Gower: asked the Secretary of State for Wales what additional road improvements he will initiate to ensure better communications to the town and port of Barry.

Mr. Ifor Davies: The hon. Member will find a list of the major road improvement schemes being carried out or planned for the next few years in Appendix 2 of the Annual Report for 1968 (Cmnd. 3930). These include trunk road schemes which will, among other things, improve communications to Barry and other ports in South Wales.

Mr. Gower: In his consideration of this matter, will the Minister take account of the fact that delay in the environs of the Cardiff area is leading to serious expense for companies such as B.P. Chemicals, which says that it costs it many thousands of pounds a year to get through that area? Will he expedite schemes to ease the standstill in the industrial area of Cardiff?

Mr. Davies: We take note of the emphasis which the hon. Member has laid on what certainly is a very important matter.

Green Paper "The Task Ahead"

Mr. Gibson-Watt: asked the Secretary of State for Wales what assistance was given by his Department in compiling the Green PaperThe Task Ahead.

Mr. George Thomas: The Green Paper The Task Ahead was prepared by the Department of Economic Affairs, and the Welsh Office, in common with other Departments, assisted in its preparation.

Mr. Gibson-Watt: Will the right hon. Gentleman recognise that in 1967 we had a publication called The Way Ahead and now we have The Task Ahead? When he

produces one next year, will he call it The Change Ahead?

Mr. Thomas: The hon. Member can do a lot better than that if he tries. The Task Ahead is the forecast for the United Kingdom. I know that he will have been pleased to note that in our Annual Report last week we were able to show that substantial gains are now coming forward for Wales.

Mr. Gwynfor Evans: Now that the Government have admitted in The Task Ahead that the reduction of regional disparities for which they hoped will be less evident in Wales, will the right hon. Gentleman admit also that the estimate in Wales, The Way Ahead of a shortfall of jobs in Wales was euphorically optimistic and that criticisms of the Government were right?

Mr. Thomas: I always feel distressed when I have to give good news to the hon. Member because I know it upsets him, but the forecast in Wales, The Way Ahead was based on the prospects in the spring of 1967. Since then steps have been taken to improve the rate of industrial movement into Wales. I should have expected the hon. Member to say how glad he is that the rate has improved so considerably.

A55 (Colcon Survey Report)

Mr. Ednyfed Hudson Davies: asked the Secretary of State for Wales whether further copies of the Colcon Survey Report on proposed routes for the A55 are now available and what representations he has received from local authorities and other bodies about the Report.

Mr. Ifor Davies: Further copies of the Report became available at the end of February and are being distributed to those who have requested them. My right hon. Friend has received the views of three local authorities, and the views of others are awaited. He has also had representations from other local bodies and individuals.

Mr. Hudson Davies: Is my hon. Friend aware that that news will be welcomed by local authorities which have had difficulty in finding copies for their members? What steps is his right hon. Friend likely to take in connection with


the Report? Will he give an assurance that he will take into account the strong feeling in the Conway and Deganwy area that any new crossing of the Conway River should be inland south of the existing bridges?

Mr. Davies: My right hon. Friend will carefully analyse the views put to him before he decides on what further studies are necessary.

Forestry Commission

Mr. Gibson-Watt: asked the Secretary of State for Wales what was the overall trading position on all operations undertaken by the Forestry Commission in Wales in forest year 1968.

Mr. George Thomas: The accounts published in the Commission's Annual Report are for the whole of Great Britain. These do not show the trading results by countries, but I understand it is estimated that there was an overall deficit on the Forestry Commission's trading operations in Wales for the year ended 30th September, 1968.

Mr. Gibson-Watt: The right hon. Gentleman did not tell us the figure. Recognising the importance of forestry to Wales, will he, with his specific responsibilities for forestry, tell us how many people in the Welsh Office are responsible for advising him about this? Does he not think it would be a good idea to have a debate on the forestry industry in Wales?

Mr. Thomas: If a debate can be arranged, I, of course, would be delighted. I have enough people to advise me on forestry arrangements in Wales. If the hon. Member presses me, I will give him the exact figures later because I should not like to mislead the House by one. Perhaps that answers his question.

Mr. Manuel: Can my right hon. Friend say in connection with the deficit he mentioned how much assistance was given to private woodland owners in Wales for research, felling and planting operations in the year he quoted?

Mr. Thomas: Welcoming that "North Wales" accent, I will supply my hon. Friend with the information he seeks if he will be patient. I shall write to him.

Oral Answers to Questions — EDUCATION AND SCIENCE

Drug Taking (Schoolchildren and Young People)

Mr. Dudley Smith: asked the Secretary of State for Education and Science what estimate his Department is making of the growth of drug taking among schoolchildren and young people; and what consultations he proposes to initiate, with a view to combating this trend.

The Under-Secretary of State for Education and Science (Mr. Denis Howell): Because of uncertainties of diagnosis and variations of incidence in different parts of the country, no general estimates can be made. The number of heroin addicts known to the Home Office under school-leaving age in the successive years 1964 to 1967 were 1, 8, 18 and 3 respectively 
The figures for youths in the same years were 39, 137, 311 and 392. My officers are in contact with local education authorities, the teachers unions and the specialist agencies about the importance of these matters.

Mr. Smith: While this problem should not be exaggerated, may I ask the right hon. Gentleman whether he is aware of the growing anxiety among parents about the development of this evil trend which was non-existent and unimaginable only 10 years ago? What special steps have been taken in senior schools to stamp it out?

Mr. Howell: A great deal of activity is going on, including the publication of a new document entitled Health Education. There are also continual conferences between our medical officers and others. One should not be too optimistic, but the hon. Gentleman will be glad to know that in the last year to which I referred the increase seemed to have been arrested.

Mr. Barnes: Can any advice be given to independent schools about this? Would not my right hon. Friend agree that the decision to expel five boys from St. Paul's School was a totally negative approach? Do not the parents of those boys have every right to expect something more constructive to be done?

Mr. Howell: I should not be called on to pronounce on a specific incident


without having all the facts, and all the facts are not at my disposal.

Mr. John Hall: What consultation is the right hon. Gentleman having with the Minister of Health about the provision of treatment centres for these children? Is he aware that in my constituency, and certainly in Buckinghamshire, there appear to be no facilities for treating these cases, certainly in the early stages of their development?

Mr. Howell: I answered a debate on this matter some time ago. It was made clear at that time that no addicts who should have treatment were not getting it; but I will make inquiries to see whether the position has changed.

C.E.R.N. Accelerator

Mr. Dalyell: asked the Secretary of State for Education and Science what is the latest British position in relation to participation in the 300 GeV C.E.R.N. accelerator.

The Minister of State, Department of Education and Science (Mrs. Shirley Williams;): I have nothing to add to the reply my right hon. Friend gave to my hon. Friend on 24th October last.—[Vol. 770, c. 328.]

Mr. Dalyell: Without wishing to press the matter too extravagantly, could not we work towards the position whereby British entry would be expected by the time of the cutting of the first sod in Geneva in 18 months' time, thereby enabling us to get in on the hardware?

Mrs. Williams: I know my hon. Friend's interest in this subject. It is true that the draft revised C.E.R.N. Convention is lying on the table and allows for further participants to join later. To answer my hon. Friend's supplementary question about hardware, the Convention allows all countries to put in for contracts, though it makes it clear that they should be divided, as far as possible, among those which are participant countries.

Football Pitches (All-weather Surfacing)

Mr. Dalyell: asked the Secretary of State for Education and Science what study he has made of an all-weather material as a surface for pitches, enabling schools to continue playing school foot-ball

matches in adverse conditions, details of which have been sent to him; and what action he proposes to take.

Mr. Denis Howell: The cost of the material in question is prohibitive for school use. All-weather alternatives to grass pitches which can be laid out at reasonable cost are described in Building Bulletin 28 Playing Fields and Hard Surface Areas, and my Department keeps itself informed about promising new developments.

Mr. Dalyell: What exactly is the policy towards both all-weather facilities and floodlit facilities in schools?

Mr. Howell: The policy of the Department is very much to encourage all-weather playing surfaces. I should like to see some part of all playing fields with all-weather facilities. We also favour a policy of floodlighting, particularly in view of the value of this during the winter months.

Mr. Charles Morrison: While I apprereciate that the cost of some of this work may be prohibitive, has the Department instigated its own research into the subject?

Mr. Howell: The hon. Gentleman is correct. The figures are rather overwhelming and we are still recovering from the results of our first examination. It costs £150 for a seeded football pitch, £11,000 for an all-weather pitch—we want to encourage this type of facility—and £100,000 to £140,000 for the sort of pitch to which my hon. Friend has drawn attention.

Triennial Open-Air Sculpture Exhibition (London)

Mr. Strauss: asked the Secretary of State for Education and Science whether, in view of the decision on economy grounds of the Greater London Council not to hold this year the triennial open-air sculpture exhibition, he will offer a contribution to enable this event to take place.

The Minister of State, Department of Education and Science (Miss Jennie Lee): Whether the exhibition is held this year is a matter for the Greater London Council, and, so far as I am aware, the Council has not applied to any other body for financial assistance to this end.

Mr. Strauss: Is my right hon. Friend aware that these open-air sculpture exhibitions have been held triennially for the last 21 years despite any economic crises that may have occurred during that time? Since this is an important and popular feature of London's artistic life which encourages British sculptors and is a great attraction to foreign visitors, and in view of the small sum involved, will my right hon. Friend press the G.L.C. to reconsider this mean and petty decision?

Miss Lee: I am aware of the regularity with which these exhibitions have been held over the years, and I seem to recall attending the very first one, in the company of my right hon. Friend the Member for Vauxhall (Mr. Strauss). I, too, would be sorry if they were not continued. The Government do not impose restrictions on this type of local authority expenditure—I want that to be clear—and it is, therefore, for the local authorities themselves to decide their priorities, bearing in mind the funds available.

Graduate Teachers (Earnings)

Mr. Wadding ton: asked the Secretary of State for Education and Science what proportion of 24-year old graduate teachers earn £1,350 per annum.

The Minister of State, Department of Education and Science (Miss Alice Bacon): Up-to-date information is not available.

Mr. Waddington: Would the Minister bear in mind that some concern has been expressed about the terms of an advertisement which was placed in the Press in December and which rather suggested that a very large proportion of graduates would earn £1,350 per annum at the age of 24? Will she ensure that the Ministry takes care to see that no advertisements which might be considered by the public at large as misleading are placed in the Press?

Miss Bacon: I think that the hon. Gentleman is under a misapprehension. I thought that his Question was concerned with this advertisement—I have a copy of it with me—the details of which made it clear that it was part of our campaign to get science graduates into the schools. The advertisement was about science

graduates. In 1966, of the trained science and mathematics teachers with good honours degrees in their sixth year of service, 46 per cent. had become heads of departments and 94 per cent. were receiving responsibility allowances.

Computer Education

Mr. Hastings: asked the Secretary of State for Education and Science what further plans he has to assist schools this year in the introduction of computer education.

Miss Bacon: There is increasing activity in this field. A number of local education authorities—for example, Hertfordshire and Staffordshire—have projects for developing computer education in schools in association with colleges of technology. The National Computing Centre has mounted a pilot course for schools, and the Schools Council is also sponsoring an experiment in the school use of computer facilities. My Department's programme of short courses for teachers includes courses in or with a bearing on computer education in schools.

Mr. Hastings: Is the right hon. Lady aware that I am questioning her Department? When will it wake up to the urgency of this problem? Will she institute a study in depth to analyse the requirements of all local authorities, all of which, I suspect, are different? Will she also press for acceptance of the fact that computing is now a full and critically important academic discipline and should be regarded as such?

Miss Bacon: I agree with the last part of the hon. Gentleman's supplementary question. This is a very important subject indeed. I assure him that we are willing to do everything we can to ensure that progress is made.

Sir E. Boyle: In view of the news which the right hon. Lady has given, and particularly in view of the important experiments being carried out by local authorities in conjunction with technical colleges, will she seriously consider publishing a Ministerial booklet or handbook on this subject on the lines of many such booklets that have appeared in the past? Does she agree that my hon. Friend has asked an extremely important Question?

Miss Bacon: A booklet has just been published, but I shall certainly be in touch with the Schools Council on this matter. I answered the previous supplementary question by agreeing that this was an extremely important subject.

Mr. Hastings: In view of the unsatisfactory nature of the Minister's Answer, I beg to give notice that I shall seek to raise the matter on the Adjournment.

Council for National Academic Awards (Cost)

Mr. Hooley: asked the Secretary of State for Education and Science what is the annual recurrent cost of the Council for National Academic Awards; and how much of this is met by students' fees.

Mrs. Shirley Williams: I understand that in the last financial year the Council's total expenditure was £80,500, of which £52,000 was met by students' fees.

Mr. Hooley: Does my hon. Friend agree that the council is doing an extremely valuable job and is training the undergraduate equivalent of two full-time universities? What co-operation is there between the council and those responsible for organising the open university?

Mrs. Williams: In answering the first part of my hon. Friend's supplementary question, I should like to thank him for his encouragement, which will be appreciated by the C.N.A.A. It would be helpful if the House paid more attention to this fast-growing sphere of further education. To answer the second part, I should be grateful if my hon. Friend would table a Question because I should like to give him a full Answer, which I cannot do at present.

School-leaving Age

Mr. Silvester: asked the Secretary of State for Education and Science what proposals he has for allowing exemptions when the school-leaving age is raised to 16 years.

The Secretary of State for Education and Science (Mr. Edward Short): None, Sir, but I am about to consult teachers and local authority associations about whether in certain circumstances older schoolchildren should be allowed to attend further education institutions instead of school.

Mr. Silvester: Would not the right hon. Gentleman agree that both the majority and minority Reports of the Crowther Committee recommended that some exemptions would be required? Why has he rejected that recommendation?

Mr. Short: I would not be prepared to agree to making exemptions from some sort of schooling because that would conflict with the whole object of raising the school-leaving age.

Mr. Christopher Price: Does my right hon. Friend agree that his answer about allowing older children to spend some time in colleges of further education is a very useful and encouraging one? Can he be a little more specific about what he means by "older children"? Can he put an age range on that phrase?

Mr. Short: I mean by older children those in the last year, the fifth year in the secondary school. There are difficulties here, but we are discussing them with the local authority associations and the teachers' organisations.

Fauna Preservation (Wales)

Mr. Brooks: asked the Secretary of State for Education and Science whether he will encourage research into the preservation of rare species which are in danger of extinction in Wales.

Mrs. Shirley Williams: I already do. The Nature Conservancy has been studying rare arctic-alpine flora in Wales for a a number of years. The conservancy is doing a survey of the number and distribution of otters in the Snowdonia National Park which will be related to the work of the Mammals Society in Great Britain as a whole, and work is also being done on the red kite. If my hon. Friend has any other particular species in mind—for example, Welsh Conservatives—perhaps he will write to me.

Mr. Brooks: Does not my hon. Friend accept, particularly at a moment when the Duke of Edinburgh is publicising the World Wild Life Fund, that there are many indigenous species under grave threat, as shown in the Mammal Society's publication last week relating to the otter? Are not urgent steps for conservation now necessary, particularly in the more remote highland areas, where such species may have a chance of surviving in their natural habitat?

Mrs. Williams: Yes; it is very important that we try to preserve our native fauna as far as we possibly can. This is obviously true of the otter not least among the threatened mammals. We hope that the Snowdonia survey will assist us in this respect.

Mr. J. E. B. Hill: What can the hon. Lady do to protect some of the rarer Welsh birds from extinction by her own colleagues such as, notably at this time of stress in the Annual Price Review, the Minister of Agriculture, Fisheries and Food?

Mrs. Williams: It is so open in education to take the phrase "rarer Welsh birds" either way that I find it rather difficult to answer the hon. Gentleman.

Public Libraries (Authors' Royalties)

Mr. Strauss: asked the Secretary of State for Education and Science what progress has been made in considering the scheme proposed by the Arts Council, the Society of Authors and the Publishers Association regarding books loaned by public libraries; and if he will make a statement.

Miss Jennie Lee: Differing views have been put forward and continue to be put forward about the Arts Council's scheme, I sympathise with the objectives of the scheme, but it is not at present possible to devote an extra £2 million to them.

Mr. Strauss: Is my right hon. Friend aware that, in view of the immense increase in Government support for the arts during the last four years, there is widespread resentment at the grossly unfair attacks made on her from some quarters in regard to this matter? Will she nevertheless press forward for the implementation of some scheme which will remove the injustice from which many authors suffer, in that they get royalties on only one book although it may be read by 100 people who borrow it from a library? Does my right hon. Friend agree that any funds made available for removing this grievance should not be channelled through the Arts Council, which exists for an entirely different purpose?

Mr. Speaker: Order. Long supplementary questions mean fewer Questions.

Miss Lee: I agree with my right hon. Friend that this is not a matter to be

financed by the Arts Council. However, it is a matter to be considered by the Arts Council, because it affects writers. A great deal of thought is going into this question, but we must consider also the points of view of the Library Association, the county councils and the local councils. All that is being very thoroughly looked into.

Mr. Channon: Does not the right hon. Lady agree that a detailed experiment along the lines of the Arts Council's scheme with a library or a number of public libraries would at least show whether the scheme put forward by the Council is viable?

Miss Lee: The Arts Council has made it very clear that it has put forward some proposals. There are alternative proposals. There are alternative ideas affecting copyright and a great deal more. A working party is to be set up. Work is continuing on this. This is one of the most complex and difficult situations that the House has to deal with.

Work Experience Schemes

Mr. Marks: asked the Secretary of State for Education and Science what reports he has received from local educational organisations of the extent and value of work experience schemes in factories, shops and offices for pupils in their final year at school; and if he will introduce legislation to extend these schemes to pupils below the statutory leaving age.

Miss Bacon: I have received several reports, including an encouraging one about a work experience scheme in Manchester. The amendment of the law relating to the employment of children and young persons is a matter for other Departments, and my Department is discussing with them the legal and safety problems arising from these schemes.

Mr. Marks: Is my right hon. Friend aware that these schemes can be of great value to schools, employers, and, most of all, pupils, but that the pupils who need them most are those with the least time to choose their employment—those below the statutory age? In view of the raising of the statutory age in the future, will my right hon. Friend have urgent consultations with my other right hon. Friends who are principally concerned?

Miss Bacon: I agree with my hon. Friend about the importance of these schemes, but I think that he will appreciate that there are certain practical things that have to be ironed out, particularly with regard to such matters as safety and industrial injuries.

Collective Bargaining

Mr. Brooks: asked the Secretary of State for Education and Science whether he will arrange an inquiry into the present arrangements and machinery for collective bargaining by all those engaged in the educational service, including those working in both schools and universities.

Mr. Edward Short: I see no case at present for an inquiry.

Mr. Brooks: Does not my right hon. Friend agree that the use of the National Board for Prices and Incomes to determine university salaries, in the absence of any preliminary collective bargaining machinery, is wholly unsatisfactory? Does he not also agree that the members of a union affiliated to the T.U.C. should not find themselves denied pay simply for working to rule in defence of their right to adequate representation in such collective bargaining machinery as exists for teachers' salaries?

Mr. Short: My hon. Friend has put two separate points. First, university teachers have never had collective bargaining. Exploratory discussions are taking place now between my hon. Friend the Minister of State, the Committee of Vice-Chancellors and Principals, and the Association of University Teachers. The discussions are still continuing. On the other point, this is a matter for the local authorities; they are the employers of the teachers. I understand that the matter is now settled in most places, and I hope that the teachers will get back to normal working.

Mr. Lane: Without necessarily seeking to defend the action taken by some members of the National Association of Schoolmasters, may I ask the right hon. Gentleman whether he appreciates how very strong is their sense of grievance at the moment and how anxiously they are seeking to find a way out of the present impasse?

Mr. Short: I realise that the members of the Association have very strong feelings,

but they have not approached me at all on this matter.

Mr. R. C. Mitchell: Will my right hon. Friend take great care before messing around with the Burnham machinery? Whatever its faults, it has worked relatively well in the last few years.

Mr. Short: I am grateful to my hon. Friend. We should remember that the Burnham machinery is statutory machinery. It is embodied in an Act of Parliament passed by this House as recently as 1965. The main objection is not to the machinery but to the procedure. The Committee can review its own procedure at any time.

Mr. Christopher Price: asked the Secretary of State for Education and Science if he will now take steps to set up a collective bargaining procedure to determine the pay of university teachers.

Mr. Edward Short: I refer my hon. Friend to my Written Reply to my hon. Friend the Member for Bradford, North (Mr. Ford) on 27th February.—[Vol. 778. c. 364–5.]

Mr. Price: Could my right hon. Friend make clear what the stumbling block is in setting up this machinery? Is it the university authorities which refuse to combine to set up collective bargaining machinery, or is it Government policy that such collective bargaining machinery is inappropriate?

Mr. Short: No, Sir. The difficulty here is inherent in the structure of the universities. The problem is that we cannot get any of the parties concerned to constitute an employers' side for negotiations.

Primary School Classes

Mr. J. E. B. Hill: asked the Secretary of State for Education and Science what study he is making of the possibilities of reducing primary school classes of over 40 children by a more even distribution of children through more flexible curriculum planning, the replacement of small classrooms and methods other than the increase of teaching staff.

Mr. Edward Short: There is constant study and experiment in this field by local education authorities, through their advisory officers, architects and teachers,


and much work has also been initiated by the Schools Council. The trend of primary school design is away from the provision of formal classrooms towards provision for more flexible grouping of children.

Mr. Hill: How many of the approximately 15,000 classes over 40 are in infants schools? Might it not be as well to try to concentrate on making more space available in the way of buildings rather than thinking exclusively in terms of teachers?

Mr. Short: I cannot give the figure off the cuff. On the second point, the building programme is now more than twice what it was four years ago, and next year it will increase still further.

Mr. Marks: Does not my right hon. Friend agree that it is not the size of classes which is important in this respect but the number of pupils and the number of teachers in each school, particularly in primary schools with their new methods?

Mr. Short: I quite agree. It is for this reason that I think that the 40–30 regulation is now out of date, and I have now initiated discussions with the local authorities and the teachers to try to find a better formula.

Sir A. V. Harvey: Will the Secretary of State give an assurance that no part-time teachers have been paid off by any authorities through lack of funds?

Mr. Short: I cannot give an assurance about that because how many teachers they employ is a matter for local authorities, but I hope no local authorities will pay off part-time teachers.

Teachers (Male Recruits)

Mr. 3. E. B. Hill: asked the Secretary of State for Education and Science what steps he is taking to recruit more men into the teaching profession.

Miss Bacon: I want to see recruited more of the best teachers, men or women. One effect of current increases in the provision of training places for graduates will be to increase the proportion of men in training. My campaign to recruit more graduates in science and mathematics should also help.

Mr. Hill: In view of the need to increase the proportion of men, particularly graduates, is there not a case for reconstituting the National Advisory Council on the recruitment and training or teachers or some equivalent body?

Miss Bacon: That is one point, but I remind the hon. Gentleman that the numbers of men recruited to 3-year training courses have increased substantially from 7,133 in 1964 to 10,670 in 1968; so it is way ahead of what was forecast some time ago.

Sir E. Boyle: Does not the right hon. Lady recognise that there is growing bewilderment and annoyance at the Government's failure to replace the old National Advisory Council on the Training and Supply of Teachers? Could she undertake that she or her right hon. Friend will try to make a statement on the subject before long?

Miss Bacon: I could not give the right hon. Gentleman that undertaking, but we are setting up a Teachers Council, and we shall have to see how that goes in the context of what he has in mind.

Flood Control Research Programme (N.E.R.C.)

Mr. Goodhart: asked the Secretary of State for Education and Science what extra funds will be made available to the Natural Environment Research Council for the implementation of the flood control research programme recommended by the Institute of Civil Engineers.

Mrs. Shirley Williams: None, Sir. The programme will be funded in the normal way through the Science Vote. The cost is estimated at £250,000 over five years.

Mr. Goodhart: As the hon. Lady said, the programme is costly and the problem is urgent. If extra funds are not made available, will not the work of the council be distorted?

Mrs. Williams: I should make it clear that this study is related to the hydro-logical aspects of flood research and not to other aspects. It will be carried out by the Institute of Hydrology with due urgency. The Institute is a component body of the Natural Environment Research Council, and, therefore, extra funds are not required for it.

Textbooks

Mr. Goodhart: asked the Secretary of State for Education and Science what advice he has given to local authorities about expanding the provision of textbooks in primary and secondary schools.

Miss Bacon: The provision of textbooks is the responsibility of local education authorities, and, although practice varies greatly between them, the average expenditure per pupil on library and textbooks has increased from £1·30 per pupils in 1964–65 to £1·57 in 1967–68.

Mr. Goodhart: Is the Minister aware that the combination of rapidly-increasing textbook prices and the Government's squeeze on educational spending makes some experts fear that the advances made in the past 12 years may be whittled away?

Miss Bacon: There needs to be a little more uniformity about this. Some local authorities are very much better than others. For example, the amount spent in primary schools varies from £0·42 to £2·67 per head, and in secondary schools from £1·27 to £4·66.

Tate Gallery

Mr. Channon: asked the Secretary of State for Education and Science what recent consultations he has had with the Trustees of the Tate Gallery; and with what result.

Miss Jennie Lee: With my colleagues in the Ministry of Housing and Local Government and the Ministry of Public Building and Works, I met a number of the Trustees last week to consider future plans for the Tate Gallery. Further consultations are taking place and must be concluded before I shall be in a position to make a statement.

Mr. Channon: In view of the great public interest in the matter, can the right hon. Lady say when she is likely to be in a position to make a statement? Can she assure the House that in her discussions consideration is being given to the alternative sites at the rear of the Gallery.

Miss Lee: I can certainly give that assurance. We are all very much in a

hurry. I hope that it will only be a matter of weeks, but I am not entirely in control of the timetable.

National Museums and Art Galleries

Mr. Channon: asked the Secretary of State for Education and Science what plans he has for the future of the national museums and art galleries.

Miss Jennie Lee: The development and improvement of our national museums and art galleries are covered by a 12-year building programme amounting to about £9 million for the period to March, 1976. This enables planning to be undertaken well ahead. Among the projects included in this programme are major extensions for the National Gallery and Tate Gallery; a new museum to be erected next to the Royal Scottish Museum in Edinburgh; and a number of projects costing £1·25 million at the British Museum, in addition to three costing over £500,000 already completed there in 1967.

Mr. Channon: In view of the considerable difficulty that has arisen about the proposed extension to one of the national galleries, can the right hon. Lady give us as much information as possible about all these detailed plans so that public opinion can know exactly what will happen will in advance?

Miss Lee: I think that the hon. Gentleman has in mind the Tate Gallery. What happened there was that the Trustees were going ahead with the best scheme that seemed possible at the time. We now have hope that we may be able to acquire adjoining ground. So there was no delay but just a new factor entering the situation. I am a natural optimist, and I hope that it will be an answer to our problem.

Mr. John Fraser: Can my right hon. Friend confirm that the estimates of future expenditure do not contain any offset for the sale of the Clapham Transport Museum? Can she confirm that she is keeping an open mind on its future?

Miss Lee: I congratulate the defenders of the Clapham Transport Museum on their gallantry, but I think that that is one battle that is now over.

Oral Answers to Questions — CANADIAN PRIME MINISTER (DISCUSSIONS)

Mr. Gwilym Roberts: asked the Prime Minister if he will initiate talks with the Canadian Prime Minister on steps which the two Governments can take to reduce their North Atlantic Treaty Organisation commitments and their total arms expenditure.

The Prime Minister (Mr. Harold Wilson): No, Sir.

Mr. Roberts: Does my right hon. Friend not agree that any avenues which can lead to a reduction in the arms millstone around our necks should be explored? Would not he describe the attitude of the Canadian Prime Minister on this problem as rather helpful?

The Prime Minister: I discussed N.A.T.O. questions with the Canadian Prime Minister when he was in Britain recently. With regard to the exploration of avenues for reducing commitments to N.A.T.O., the only avenue that is in any way rewarding, if we can ever tread it, is one of mutually agreed reductions between Western and Eastern Europe.

Oral Answers to Questions — EUROPEAN ECONOMIC COMMUNITY

Mr. Gwilym Roberts: asked the Prime Minister if, arising from his talks in Bonn, he will make a further statement on Her Majesty's Government's application for the United Kingdom to join the Common Market.

Mr. Marten: asked the Prime Minister if he will call a conference of the Common Market Prime Ministers to discuss drawing up a revised version of the Treaty of Rome.

Mr. Bruce-Gardyne: asked the Prime Minister if he will call a meeting of European Heads of Governments to consider the proposals put to the British Ambassador by the President of France on 4th February.

The Prime Minister: Our policy remains to seek full membership of the European Communities, and our application is before the Council of Ministers of the Six. The joint declaration issued after

my visit to Bonn shows the Federal German Government's support for our application.
On the question of calling a meeting of Common Market Prime Ministers or European Heads of Governments, I have no plans to do so, Sir.

Mr. Roberts: Does not my right hon. Friend agree that it may again be time to ask what Parliament's views on the issue are? Does he accept that many of us on this side of the House who initially supported the application now feel that it might be better for Britain to stay sitting at the back of the hall until, with her increasing economic strength, she is called to return to the Common Market stage?

The Prime Minister: I have no reason to think that more than a small number of hon. Members have changed their view since their vote of May——

Hon. Members: Oh!

The Prime Minister: Those who shout "Oh!" voted against it, so I do not think that they count in this respect. I said that I have no reason to think that more than a small number have changed their views. If my hon. Friend has, I would advise him not to be faint-hearted or weary of well-doing in these matters.
I think that the whole House agrees that in or out of the Common Market we need the maxium economic strength.

Mr. Marten: Perhaps the Prime Minister should try a free vote in the House on this question.
Does he recall saying in the debate on the Common Market on 8th May, 1967, that the federal momentum towards supra-nationality had, for the time being at least, died away? How does he reconcile that with his other statement on 6th February this year that he was against federalism and supra-nationality? If he really believes what he says, does not that surely mean that Articles 137 to 148 must be revised?

The Prime Minister: No, Sir. With regard to a free vote, I do not recall that the Government of which the hon. Gentleman was a member entrusted this matter to free votes.
With regard to the hon. Gentleman's second question about my references to


supra-nationality and federalism, I referred to political federalism and political supra-nationality. In the speech to which the hon. Gentleman referred, I said that of course we accept the principles of the Treaty of Rome, which deals with purely economic matters. I do not believe that there are many in the House, though there may be a few, and I do not believe there are all that number in Europe, who are in favour of political federation, particularly affecting defence matters.

Mr. Bruce-Gardyne: Would not a meeting with the Head of the French Government enable the Prime Minister to clear up a few misunderstandings on this matter? For instance, the West German Government spokesman has said that it was the German Government who encouraged him to have discussions with the French, whereas the right hon. Gentleman said in the House on Tuesday that this was completely untrue.

The Prime Minister: The position is that I informed the Head of the West German Government—and this was the first he had heard of it—that it was our intention to say that we were willing to pursue talks with the French Government and were saying so to President de Gaulle. Dr. Kiesinger welcomed that, but it was not he who suggested to me that we should do it.

Mr. Heffer: Does not my right hon. Friend agree that forward-looking and progressive opinion in this House and elsewhere is still in favour of Britain joining the E.E.C.? Would he not also agree that, in view of the difficulties we have run into, it is important to have consultation with the Head of the French Government at the earliest possible moment? Will he not, therefore, reconsider the answer he gave me the other day to the effect that such an arrangement is not being considered in the near future?

The Prime Minister: I have always been ready to concede that, in the matter of forward-looking and progressive opinion on this question, my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was forward and progressive-looking before I was. I grant him that right away. That is all the more reason why I should regret any failing spirit on his part, such as he has shown in a previous. Question a few days ago and

in the supplementary question he has just put. I do not believe that what he suggests is the right way to achieve what he, with his forward look, has always felt it right to seek.

Sir Harmar Nicholls: Do we understand from the Prime Minister's answer and the manner in which he has given it that he is not looking at any possible alternatives—that here we are, knowing that we cannot get into the Common Market, however desirable some may think that is, but not looking into alternatives? Have we to remain in limbo?

The Prime Minister: We are not in limbo. I have said on a number of occasions that we have studied the alternatives very carefully. But the fact that there is a clear, obvious and definable road block on the way to British entry to the Common Market does not mean that we should be beguiled into entering attractive-looking bridle paths which may not lead anywhere in the matter of European unity.

Sir Alec Douglas-Home: Is not our position comparatively sensible and at least honourable? Is it not that we leave our application to join the Common Market on the table, with these two provisos—that we do not go in as supplicants and are free meanwhile to make any trading arrangements, bilateral or multilateral, which should turn out to our advantage?

The Prime Minister: Yes, Sir. The right hon. Gentleman's provisos, as well as the earlier part of the supplementary question, are perfectly correct. That is our position. In addition, as the right hon. Gentleman has noted and commented on, my right hon. Friend the Foreign Secretary is taking every opportunity to increase facilities for improved European co-operation and unity in political matters through Western European Union.

Mr. Shinwell: If, after the next General Election, my right hon. Friend is returned to power, as I expect he will be, will he give an assurance that the rank and file on this side of the House—and not what are regarded, although I have never used that description myself, as the "pay-roll Members"—will have an opportunity of voting and expressing their opinion against entry into the Common Market?

The Prime Minister: I am not sure whether my right hon. Friend puts himself in that classification. Of course, it is a matter of regret that, despite his perceptive forecast of the result of the next General Election, we shall not have the pleasure of his membership of the House, according to a recent announcement he made. But my right hon. Friend will recall that he not only had an opportunity to vote but did vote in this House in May, 1967, on this question, and that the matter has been successively debated and voted on at the Labour Party conference.

Sir C. Osborne: asked the Prime Minister what conditions the French Government have advised him they will seek to impose upon Great Britain before they agree to Great Britain being allowed to join the European Common Market.

The Prime Minister: The French Government have not advised Her Majesty's Government of conditions in the sense of the hon. Member's Question. The hon. Member will be aware of public statements made by the French Government indicating their opposition to British entry, but the reasons given have appeared to vary from time to time.

Sir C. Osborne: The Prime Minister will remember that on Tuesday he said that
.. the French Government have been told …

Mr. Speaker: Order. No quotations can be made in supplementary questions.

Sir C. Osborne: The Prime Minister said that the French Government had been told of our willingness to enter into negotiations and that that willingness has been repeated since the Soames affair. What sort of response has been received from the French Government to that British initiative?

The Prime Minister: No response as yet has been received. Our position all along—and we have stated it from time to time to the French Government—has been clear. The French Government have said that we were not ready to go into Europe, mentioning economic factors, including the number of strikes in Britain. This surprised me because the number of strikes here has been far less than the number of strikes in France over the

last ten years. Other economic questions have been raised as well. But I think most right hon. and hon. Members will have concluded that the true objection is political and a rather general one in that it has been stated by the French Government that British entry would mean changing the Common Market into something very different from what it is today. That is the general position that the French Government have taken up, and we have no reason to think after recent exchanges that they have changed their views.

Mr. Jay: Does my right hon. Friend think that the Government's recent policies have been successful in promoting unity in Europe?

The Prime Minister: Our policy is directed to achieving unity in Europe. This matter has been full debated in the House recently. We shall not achieve unity in Europe on the basis of appearing to enter into discussions which are based on statements that this country and almost no one in this House could ever accept. Nor could we enter into bilateral discussions without the fullest consultation with our other partners in Europe. We should not achieve unity in Europe on that basis either.

Sir D. Walker-Smith: Since the supranational structure of the E.E.C. is due primarily to the chronological accident that the Treaty of Rome was concluded shortly before the General's advent to power in France, would it not obviously be sensible, once the dust of the "affaire Soames" is settled, to enter into discussions with France to see whether we cannot get a revised and less supranational structure for the Community much more to the liking of France and in the interests of Britain?

The Prime Minister: All these matters could be discussed between us, and we are willing to discuss them, but there can be no question of entering into a private deal with France behind the backs of the Five. British entry must require the agreement of the Six as a whole. Some of these questions might well come up in negotiations for entry if the Six as a whole agreed to our entry.

Mr. Maxwell: Does not my right hon. Friend regret the appalling effect on


Anglo-French relations which the Soames affair has had? Would he be willing to agree, in the light of President Nixon's conviction that President de Gaulle is a person with whom we must do business, that Her Majesty's Government were wrong in deciding to have an all-out war with the French President?

The Prime Minister: I do not accept any of the phrases in my hon. Friend's supplementary question. We have said that we want to do business with President de Gaulle. We have done business with him on many occasions. But the business cannot be a one-sided affair, with our acceptance of many ideas which my hon. Friend would not, I am sure, be prepared to accept. Nor could our business be bilateral, secret or without consultation with our other European partners.

Sir J. Rodgers: While agreeing that we all know where the road block is which prevents our entry at the moment, may I ask the right hon. Gentleman whether he does not agree that to put ourselves in the position where we appear to be ganging up with the other Five against France is the worst possible way to remove it?

The Prime Minister: It would be if true, but we are not in the least ganging up with the other Five members against France. We have stated our position, and we stand by it. Many right hon. and hon. Members agree with it. Certainly we should do nothing to advance the cause of unity or of British entry if we started doing deals behind the backs of the other Five and presented them with a fait accompli. We might then have five road blocks instead of one.

Mr. Barnett: Most people would agree with the forward-looking remarks of my right hon. Friend, but does he not agree that it would be more realistic to recognise that while President de Gaulle is around there is no likelihood of British entry and that we might avoid further affairs like the recent one if we simply left our application on the table until such time as that particular gentleman is no longer around?

The Prime Minister: That does not sound very forward-looking to me. Our application is on the table. As the right

hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) has said, it is right to leave it there. We are not supplicants or crawling for entry. We are not surrendering vital positions of national interest in these matters, and, of course, it is right that we should talk with all our friends in Europe, including the French Government, wherever this is possible.

Mr. Thorpe: Is not the evidence of the past few weeks that at least five members of the Community are increasingly enthusiastic about co-operation with this country and that it is the Republic of France, not the United Kingdom, which is becoming increasingly isolated from European moods?

The Prime Minister: The right hon. Gentleman has successfully identified the road block to which I referred a few minutes ago. It is not for me to express an opinion about the relations between the Government of France and the Five. Certainly I feel, and I said so publicly in Bonn, that continued delay of the kind we are having, continued frustration and obstruction of the kind that is going on, is not only bad for the ultimate unity of Europe and for British entry, but also extremely bad for the forward movement of the Six within the existing Common Market.

Oral Answers to Questions — QUESTIONS TO THE PRIME MINISTER

Sir W. Bromley-Davenport: On a point of order. May I ask a question further to that asked by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey)? [Interruption.] We have had a quarter of an hour for the Prime Minister's Questions. We have been lucky to get through five evasive Answers——

Hon. Members: Three.

Sir W. Bromley-Davenport: The right hon. Gentleman coupled two together.

Mr. Speaker: Order. The House must not assist the hon. and gallant Gentleman to put his point of order.

Sir W. Bromley-Davenport: I appreciate your help, which I badly need, Mr. Speaker.
To be constructive, would it not be possible to get the right hon. Gentleman the Foreign Secretary to answer Questions instead of the Prime Minister? I have been bursting to ask a supplementary to Question No. 4, which I cannot now have answered.

Mr. Speaker: Order. This is a point which was raised by one of the hon. and gallant Gentleman's hon. Friends two weeks ago. Repetition of a false point of order does not make it a true point of order. Questions to the Prime Minister are important. There are many supplementaries and a Minister has the right to answer Questions in the way he likes. It is not a point of order.

Sir W. Bromley-Davenport: Further to that point of order——

Mr. Speaker: Order. Gestures have no effect upon me.

Sir W. Bromley-Davenport: On a new point of order. May I, first, apologise to you, Mr. Speaker, in that I was unable to hear a single word of what you have said. We are not objecting to the number of hon. Members who are asked to ask supplementaries. What we object to is the amount of "flannel" that comes from the Prime Minister.

Mr. Speaker: Order. To the second point that the hon. and gallant Gentleman has raised, my answer, which he will read in HANSARD tomorrow, with my previous one, is that it is not a point of order.

BUSINESS OF THE HOUSE

Mr. Maudling: May I ask the Leader of the House whether he will state the business of the House for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): Yes, Sir. The business for next week will be as follows:

MONDAY, 10TH MARCH—Supply [10th Allotted Day]:

Navy Estimates, 1969–70, Vote A.

Motions on the Income Tax Transitional Relief (Extension of Period) Orders.

TUESDAY, 11TH MARCH—Second Reading of the Children and Young Persons Bill.

Lords Amendments to the Mines and Quarries (Tips) Bill.

Prayer on a Statute made by the Oxford University.

WEDNESDAY, 12TH MARCH—Supply [11th Allotted Day]:

Army Estimates, 1969–70, Vote A.

Second Reading of the Army Reserve Bill.

THURSDAY, 13TH MARCH—Supply [12th Allotted Day]: Vote on Account of the Civil Estimates and Defence Central Estimates, 1969–70.

Debate on an Opposition Prayer on the Industrial Training Levy (Agricultural, Horticultural and Forestry) Order.

At seven o'clock, the Chairman of Ways and Means has named the Brighton Corporation Bill and the York Corporation Bill for consideration.

FRIDAY, 14TH MARCH—Private Members' Motions.

MONDAY, 17TH MARCH—Supply [13th Allotted Day]:

Air Estimates, 1969–70, Vote A.

Mr. Maudling: Can the right hon. Gentleman tell us the date on which his right hon. Friend the Chancellor of the Exchequer will open his Budget and. secondly, will the Government provide an early opportunity for a debate on Nigeria and Biafra?

Mr. Peart: My right hon. Friend the Chancellor has asked me to say that he will open his Budget on Tuesday, 15th April.
On the right hon. Gentleman's second point, the foreign affairs debate, I think that I should try to find time for it before Easter.

Mr. Thorpe: Arising out of the last question to the Leader of the House, may I ask whether he is aware that there is a growing sense of anger and repulsion not only in the country at large, but in this House, at the Government's continued supply of arms to Nigeria and that many of us look at him to give a very early date for the debate, if not next week, then the week after?

Mr. Peart: I thought that I had given given a sympathetic reply which would be accepted. It will be before Easter.

Mr. William Hamilton: Can my right hon. Friend say whatever has happened to the Parliament (No. 2), (No. 3), (No. 4) and (No. 5) Bills—and particularly the (No. 2) Bill?

Mr. Peart: I was asked for the business for next week. The Government intend to pursue their own course on that Bill.

Mr. Hugh Fraser: The right hon. Gentleman must know that the House wants a debate on the specific issue of Biafra, and not to have it lost in a foreign affairs debate. That is the assurance we want now—an early debate. I do not see why it should not be next week—especially as the Parliament (No. 2) Bill is in seeming demise. Some of next week's business could be easily pushed forward.

Mr. Peart: The right hon. Gentleman should accept what I have said. I thought that it was acceptable to the House.

Mr. J. Griffiths: I am glad that my right hon. Friend is promising that we shall have an opportunity of discussing the situation in Nigeria and Biafra. May I ask whether he will ask the Foreign and Commonwealth Secretary to make a statement next week on the representations it is reported that he has made to the Federal Government in Nigeria about the bombing in Biafra, and to tell the House what those representations were and what was the reply from the Federal Government?

Mr. Peart: I will draw my right hon. Friend's attention to the point.

Mr. Iain Macleod: Now that the Budget day has been announced, could the right hon. Gentleman arrange for a statement next week, or, better still, could he tell us now, what the Government's plans are for taking the subsequent stages of the Finance Bill, and the key debates linked with them?

Mr. Peart: It might be convenient to the House if I say that it has been thought that we could have a variation of last year's experiment, when the Bill went upstairs for the whole of the Committee stage. This year, we hope that it will be possible to deal with a number of

issues upstairs, while seeking to reserve for the Floor of the House a selected number of topics, say, eight to 10, of a general character and interest.

Mr. Boston: Would my right hon. Friend arrange to have consultations about the urgent need for a statement on the timing of the local inquiries announced by the Commission on the Third London Airport, as there is considerable concern that the time before these inquiries is very short indeed, especially as the first one, at Foulness, is due to start on 5th May, when local authorities will be immersed in the local elections?

Mr. Peart: I am aware of my hon. Friend's point, and I will draw it to the attention of my right hon. Friend the President of the Board of Trade.

Mrs. Ewing: Has the attention of the Leader of the House been drawn to Motion No. 161, headed "Initiative of Women Members of Parliament", and proposing that an all-party delegation of women M.P.s be sent to Biafra to see whether they can help in the terrible situation there?

[That this House would welcome a visit of an all-party delegation of women Members of Parliament to both sides in the Nigerian war to report on the plight of the civilian population in general and of women and children in particular.]

Mr. Peart: I have seen the Motion. I think that there will be an opportunity later to discuss the matter.

Mr. Jay: Has my right hon. Friend seen Motion No. 171, on the future of world trade?

[That this House applauds the declaration of President Nixon in his Inaugural Address that he seeks an open world, open to the exchange of goods; and urges Her Majesty's Government to examine the possibilities for the creation of a free trade association of countries based on the United Kingdom, Canada, the United Kingdom's partners in the European Free Trade Association, and the United States of America and open for all, including the European Economic Community, to join.]

As the Prime Minister drew attention last week to the importance of the signatories of the Motion as well as to the large number who signed, would not


this be much more worth debating than the Parliament (No. 2) Bill?

Mr. Peart: I do not think that the Government can ignore the Motion. It is signed, I agree, by many hon. Members. I will draw my right hon. Friend's attention to it, but we cannot have a debate next week.

Mr. A. Royle: Is the Leader of the House aware that the President of the Board of Trade has completed his inquiry into auction rings? Will he tell the House when his right hon. Friend will be making a statement on this subject and when we may expect the report to be published?

Mr. Peart: I cannot say when, but I will speak to my right hon. Friend about it.

Mr. Winnick: Is the Leader of the House aware that all the attempts made this week to get the Foreign Secretary to make a statement on the representations he has made to the Nigerian High Commissioner have not succeeded? Will he, therefore, bear in mind the pressing need for a statement on the bombing in Biafra to be made next week, if we are unable to have a debate?

Mr. Peart: Yes, I will bear that in mind.

Mr. Peyton: Will the Leader of the House explain what he meant when he said that the Government intended to pursue their course on the Parliament (No. 2) Bill? So far as most of us are aware, there is not much sense of movement. We would like to know what estimation of progress the Government have made.

Mr. Peart: I know the views of the hon. Member. He does not want any movement. The Government will proceed with the Bill.

Mr. Howie: Is my right hon. Friend aware that I am extremely interested in the views of the Opposition Front Bench on the position of the bishops, which is dealt with in Clause 6 of the Parliament (No. 2) Bill? If we cannot discuss that next week, will he tell us when we can?

Mr. Peart: I cannot say; we shall have to wait to see what progress is made.

Mr. Ian Lloyd: Has the Leader of the House seem Motion No. 196 on the sailing of British container ships from Rotterdam, standing in the names of many hon. Members and myself?

[That this House notes with concern that the first sailing of the first British deep-sea containership, 'Encounter Bay', took place from Rotterdam, and that the container terminal built at Tilbury specifically for this service could not be used, despite the conclusion of a comprehensive agreement with the employees directly concerned and considers that the permanent diversion of this valuable trade would seriously damage the British shipping industry, the export drive and the balance of payments.]

Is the right hon. Gentleman further aware of the remarkable publicity attached to the successful launching of the container service from Japan? Will he therefore consider whether, instead of spending much of our time next week in discussing the cost of defending ourselves against our external enemies, we ought to be considering the cost and manner in defending ourselves from internal economic lunacy?

Mr. Peart: I will draw my right hon. Friend's attention to the terms of the Motion. I give an assurance that I will personally look at this matter, which is important.

Mr. John Fraser: Will my right hon. Friend consider, rather than devoting six days to a ritual fire dance over defence and the Service Estimates, diverting the time available to more important legislation? Will he consult his right hon. Friends about sending the Estimates to a Select Committee where they can be given much more detailed and constructive examination?

Mr. Peart: I cannot accept that at this stage.

Sir J. Rodgers: May I draw the attention of the Leader of the House to the Motion on the Order Paper which has been signed by well over 100 hon. Members, requesting that the Prime Minister give consideration to the erection of a statue to Sir Winston Churchill?

[That this House, mindful of the great services rendered to his country by the late Right honourable Sir Winston


Churchill, K.G., O.M., C.H., and noting that there is no statue available to the public in the centre of London to commemorate this outstanding leader of Britain, calls on Her Majesty's Government to provide a suitable site for such a memorial.]

Mr. Peart: I have noted the Motion and will bear it in mind.

Mr. Mayhew: Has the Leader of the House seen the Motion on the Order Paper in the names of a large number of hon. Members and myself calling for urgent action in relation to the worsening crisis in the Middle East?

[That this House, reaffirming its support for a peaceful settlement of the Arab / Israeli conflict based on the Security Council resolution of November 1967, calls on Her Majesty's Government to negotiate at the United Nations a four-power agreement on a time-table for implementing the resolution and on an arms embargo to operate against any country not fulfilling the time-table.]

Is it not time that the House discussed this again?

Mr. Peart: This is an important matter, but it will not be debatable next week.

Sir C. Osborne: Will the Leader of the House consider altering next week's business if the strike at Dagenham and in the docks gets worse, so that we can discuss these vital matters?

Mr. Peart: This is an important matter. I believe that my right hon. Friend, if necessary, would seek to inform the House in the best way possible.

Mr. Orme: Despite what my right hon. Friend has said about the Nigerian/Biafran situation, is he aware that there is a large measure of public opinion on this issue outside the House, and that it would be a negation of parliamentary democracy for this House not to debate the issue in the near future?

Mr. Peart: I have given an answer which, I hope, is acceptable.

Mr. Crouch: Is the Leader of the House aware that he is misinterpreting the temper of the House and of the people by putting off a peace initiative in Nigeria until just before Easter? He must reconsider his decision not to have a debate next week.

Mr. Peart: I have promised a debate.

Mr. Crouch: Next week.

Mr. Peart: I cannot be committed specifically to next week, but I will do my best to have a debate as soon as possible. I cannot go further than chat.

Mr. Shinwell: Will my right hon. Friend be kind enough next week to give us the date when the Merchant Shipping Bill will be introduced?

Mr. Peart: I will have a word with the President of the Board of Trade; it is his responsibility. I know that it is of concern to many hon. Members.

Earl of Dalkeith: When may we expect the report of the Hunt Committee, and may we have an early debate as soon as it is published?

Mr. Peart: Very soon. We must await the report first.

Mr. Henig: I draw the attention of my right hon. Friend to Motion No. 169, standing in the names of myself and 156 hon. and right hon. Members.

[That this House, deeply concerned about the continued fighting in the Nigerian civil war, calls upon Her Majesty's Government:—To make a fresh approach to other countries sending military equipment to the combatants with a view to securing through international action a complete embargo on the supply of arms to both sides; To use its good offices to try to bring about a meeting between General Gowon and Colonel Ojukuwu to discuss an immediate ceasefire; Substantially to increase the flow of food and other forms of economic aid to alleviate the suffering caused by the war in both Nigeria and Biafra.]

Is my right hon. Friend aware of the intense feeling there is on this issue? Will he stop wriggling and give a firm pledge that we will have a debate specifically on Nigeria and Biafra, and that it will not be lost in a general debate on foreign affairs all round the world?

Mr. Peart: My hon. Friend should not use the word "wriggling". I am in no way wriggling. I am trying to help hon. Members.

Mr. Hastings: Will the Leader of the House at least guarantee that we shall not


waste another day discussing the ridiculous Parliament (No. 2) Bill before we debate Nigeria and Biafra?

Mr. Peart: I have already made my position clear on that.

Mr. Barnett: The House will have noted that my right hon. Friend has conceded to the Opposition that parts of the Finance Bill in Committee will this year be taken downstairs instead of upstairs. Will he not take too much notice of the filibustering tactics last year, and not concede too much of the Bill to be debated on the Floor of the House?

Mr. Peart: I would have thought that the programme I have mentioned would have been accepted in a favourable spirit.

Sir A. V. Harvey: The Leader of the House has said that about eight subjects in the Finance Bill which were of interest to the House could be taken on the Floor of the House. Will he say who will select the subjects and give an assurance that the Committee as a whole will consider what subjects will be taken on the Floor of the House?

Mr. Peart: The usual channels. I am sure that we can have talks about this.

Mr. Philip Noel-Baker: While I appreciate my right hon. Friend's assurance of a debate on Nigeria and Biafra as soon as possible, in view of the great danger in the Middle East, will he also consider whether the House will be able to debate that subject before Easter at the latest?

Mr. Peart: I am aware of its importance, but I have made my statement on that.

Mr. Hordern: Is the Leader of the House aware that four weeks is far too long to wait for a debate on the Nigerian situation? Will he therefore undertake to hold such a debate either next week or the week after?

Mr. Peart: I cannot add to what I have said. I hope that hon. Members will not ask me to repeat it.

Mr. Molloy: Will not my right hon. Friend agree that the questions put to the Prime Minister show that the issue of Britain's relationship with Europe is of great importance, particularly as we now seem to have given the cold shoulder

to our E.F.T.A. partners and our other allies in Europe? Should we not have a full debate on the European situation?

Mr. Peart: I know that this is an important matter. Hon. Members have pressed me to have full foreign affairs debates on many subjects. I have stated my intention, but we cannot have it next week.

Mr. John Hall: The Leader of the House can be under no illusion about the feeling on both sides of the House on the necessity for a debate on Nigeria. I am sure the House accepts his assurance that there will be a debate, but would it not meet the wishes of hon. Members if he announced on Monday the date for such a debate? Would it not also meet the wish of the House if it were to be on that date?

Mr. Peart: It is not easy to do this. I will consider it sympathetically, but J do not like to be tied.

Mr. MacDermot: Will my right hon. Friend consider referring to the Select Committee on Procedure the question whether the Ten Minutes Rule procedure should continue in its present form? Is he aware that many hon. Members think that that procedure is misleading to the general public, who do not understand it, that it is ineffective as a means either of legislation or of raising a grievance? It tends to occupy——

Mr. Speaker: Order. The hon. and learned Gentleman must not discuss in a business question the merits of what he would like to have discussed by the Select Committee.

Mr. MacDermot: Is my right hon. Friend aware that the only effect of this procedure is to empty the Chamber before we begin our main debate?

Mr. Peart: I have some sympathy with that, though this is the first time that my hon. and learned Friend has brought it to my notice in the House. I will look into it.

Mr. Maudling: The Leader of the House was kind enough to respond to my initial question about a debate on Nigeria, but he will have noticed the very strong feeling about the matter on both sides of the House. Can he, therefore, assure us, first, that there will be


a debate not on foreign affairs generally, but on the specific point, and, secondly, can we consider through the usual channels how this can be done as soon as possible, because I am sure that it is the will of the House generally?

Mr. Peart: I accept that. If we can have talks in the usual way, I will be pleased to do it.

Mr. Costain: Referring to the reply of the Leader of the House to my hon. Friend the Member for Richmond (Mr. Royle) on auction rings, is the right hon. Gentleman aware that the Committee stage of the Auction Rings Bill will be coming up on Wednesday? In view of that, can he assure the House that his right hon. Friend the President of the Board of Trade will make his statement before Wednesday so that we can take account of his findings in this matter?

Mr. Peart: That is a valid point. I will have a word with my right hon. Friend.

Mr. Russell Kerr: May we know when we may expect the Government's reply on the last Report of the Select Committee on Nationalised Industries?

Mr. Peart: I hope very soon.

Captain Orr: Can the right hon. Gentleman say whether the Agriculture Price Review has been further delayed? If so, when may we expect to have the report?

Mr. Peart: I do not think that there has been any delay. As one who has had to deal with four Price Reviews, I think that it is proceeding.

Mr. Hugh Jenkins: Can my right hon. Friend say whether it is true that the Prime Minister is considering transferring responsibility for aircraft noise from the Board of Trade? May we have a debate on Motion No. 149, so that the House can discuss which Department would be appropriate to receive responsibility?

[That this House believes that aircraft noise would be more effectively controlled if responsibility for its limitation were transferred from the Board of Trade to the Department of Health and Social Security; and requests the Prime Minister to examine this proposal with a view

to the introduction of the change without delay.]

Mr. Peart: I cannot accept this for business next week.

Mr. J. E. B. Hill: Can the Leader of the House say whether we can still expect the Annual Price Review to be made next Wednesday and, if not, why not?

Mr. Peart: I cannot make any further statement on that.

Mr. Hector Hughes: As Scottish affairs are conspicuously absent from next week's business, will my right hon. Friend give time next week for Motion No. 192, on the Scottish Economy?

[That this House, realising the uneven distribution of trade, industry, commerce, and employment in Scotland which are mainly concentrated in the South of Scotland, calls on the Government to make better use of modern scientific methods which are now available in this technological age, in order to improve national and external facilities and communications throughout Scotland and in order to attract to and establish in North North-East and North-West Scotland more industries and employment than at present exist there for the benefit of Scotland's internal prosperity and exports particularly to northern parts of Europe and America in relation to which Scotland stands geographically in an especially favourable position.]

Mr. Peart: I have noted the Motion standing in my hon. and learned Friend's name, but he must remember that many of the Estimates affecting defence matters affect Scotland.

Mr. Marten: When the Leader of the House replied to my hon. Friend the Member for Richmond (Mr. A. Royle), he said that a statement would be made about auction rings next week. May we have an assurance that the report will be published next week?

Mr. Peart: I cannot promise that. As I have already undertaken, I will have a word with my right hon. Friend the President of the Board of Trade.

Mr. Ogden: Is my right hon. Friend aware of the increasing concern at the Government's inability to provide time for the Merchant Shipping Bill and that the


reply which he gave to my right hon. Friend the Member for Easington (Mr. Shinwell) is almost exactly the same as that given six weeks ago?

Mr. Peart: That is quite true. There is no Bill as yet.

Mr. Hawkins: Would the Leader of the House arrange a debate, not later than next week, on the recent Report of the Select Committee on Agriculture, so that the influence of this all-party Bill can be fully brought to bear on the present Price Review negotiations?

Mr. Peart: I do not think that I could do that. That would be bringing undue pressure to bear. I think that hon. Members should read the Report, which came out only the other day.

Sir Harmar Nicholls: On a point of order. Mr. Speaker. Is it in order to say that the setting of a Parliamentary date is bringing undue pressure to bear?

Mr. C. Pannell: Do not be silly.

Mr. Speaker: Order. The hon. Member for Peterborough (Sir Harmar Nicholls) must allow the Leader of the House to answer Questions in his own way.

Mr. Wellbeloved: Further to my right hon. Friend's reply in respect of the Roskill Committee's timetable for local inquiries into alternatives for the third London Airport, will he provide time for a debate on the matter, bearing in mind that the Stansted lobby had several years and numerous Parliamentary occasions to oppose the proposal for an airport at Stansted and that, in common justice, the other people require the same?

Mr. Peart: I note what my hon. Friend has said, but not next week.

Mr. Dance: Has the Leader of the House seen Motion No. 185, which refers to the disastrous effect of the present policy on overdrafts on the private sector of the economy? Will he give time for a debate on this very important subject?

[That this House, believing that the future prosperity of the country is dependent on the free and full development of private enterprise and believing that the practice of the present Government of attempting to enforce undesirable policies

without any legal authority is unconstitutional and wrong, deplores the handicaps sought to be imposed by the Government on the private sector of the economy by restricting bank overdrafts.]

Mr. Peart: I do not doubt its importance, but not next week.

Mr. Channon: May I press the Leader of the House a little further about his reference to a statement by the President of the Board of Trade on auction rings? It is vital to have this report published before we are asked to discuss in detail the Committee stage of the Bill.

Mr. Peart: I have already promised to have a word with my right hon. Friend the President of the Board of Trade.

Mr. Peter Mills: In view of the fact that net farming income probably dropped by £40 million last year, may we have a statement on the Price Review by next Wednesday?

Mr. Peart: The hon. Gentleman knows the procedure. I think that he must await the statement of my right hon. Friend.

Mr. Kenneth Lewis: Will the Leader of the House assure us that, when he discusses with his right hon. Friends the apportionment of the Finance Bill proceedings, he will consult back bench hon. Members on both sides so that there is agreement as to which parts should be considered in Committee upstairs and which parts in Committee on the Floor of the House?

Mr. Peart: I always like to hear the views of back bench Members. When the time comes, no doubt they will be conveyed to me.

Mr. Farr: In view of the evasive replies of the Leader of the House, and the fact that delays are reported in concluding the Agriculture Price Review, may we have an early opportunity of debating this important subject?

Mr. Peart: I am not being evasive. When my right hon. Friend completes his negotiations, he will inform the House in the usual way.

Mr. Bruce-Gardyne: In view of the apparently conflicting explanations from the Chancellor of the Exchequer and the Prime Minister on the latest rise in the


Bank Rate, now that the Parliament (No. 2) Bill has blessedly disappeared from view for a time, may we have an early debate on the Government's monetary policy, coupled with the Basle Agreement?

Mr. Peart: No, I do not think so. We shall soon be having the Budget debate, in any case.

Mr. Jopling: May we have a promise that we shall have a statement on the Price Review next week, in view of the widespread rumours of trouble in the negotiations and the reported resignation of the Minister of Agriculture?

Mr. Peart: The hon. Gentleman should not pay attention to rumours.

BILL PRESENTED

CRUELTY TO ANIMALS

Bill to control the supply of live cats and dogs for the purposes of painful experiments; and for connected purposes; presented by Mr. Eric Lubbock; supported by Mr. Peter Bessell, Mr. David Steel, and Mrs. Winifred Ewing; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 110.]

ROYAL ASSENT

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act, 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. National Insurance &amp;c. Act, 1969.
2. New Towns Act, 1969.
3. Shipbuilding Industry Act, 1969.
4. Pensions (Increase) Act, 1969.
5. Redundancy Rebates Act, 1969.
6. Covent Garden Market Act, 1969.

EARNINGS-RELATED SOCIAL SECURITY

Mr. Speaker: Before the debate opens, may I say that I have not selected the Liberal Amendment to the Motion, in line 1, leave out from 'House' to end and add:
'rejects the White Paper on Proposals for Earnings-Related Social Security, Command Paper No. 3883, on the grounds that it seeks to extend the role of Government into a sphere where it is neither helpful nor necessary'.
but I have selected the official Opposition Amendment standing in the name of the right hon. Member for Bexley (Mr. Heath), who all of us hope will soon be well again.

4.0 p.m.

The Secretary of State for Social Services (Mr. Richard Crossman): I beg to move,
That this House approves the White Paper on Proposals for Earnings-Related Social Security, Command Paper No. 3883, as a basis for legislation; and invites Her Majesty's Government to continue consultation with a view to preparing legislation.
Before I introduce this White Paper, I hope that the House will permit me one personal observation. It is not true, as some of its detractors try to pretend, that this scheme is in any sense a personal production of mine. It is true that many years ago I chaired the working party which produced our election blue-print "National Superannuation" when we were still in opposition, but serious work really started when we took over in 1964.
My right hon. Friend the Member for Lanarkshire, North (Miss Herbison) set to work, with the help of my right hon. Friend the Member for Sowerby (Mr. Houghton), to turn what had been an election blue-print into a practicable and workable scheme for legislation. When I rejoined the team, some time later, I was delighted to find that, though a vast amount of important detail had been added, particularly in the new women's charter, the main structure of the idea that we developed in opposition had stood the test of the severest scrutiny by a whole army of Whitehall experts, particularly in the Treasury and the Government Actuary's Department.
Nor were they our only critical helpers. I have been deeply appreciative, particularly during the last 12 months, when the


practicability of the scheme was ready for pre-testing outside Whitehall, by the number of people who have informally and without obligation on either side, given us help—outstanding pension experts from the C.B.I., from the Social Services Committee of the T.U.C. and, not least, from the Life Offices Association and the National Association of Pension Funds.
When we launched the idea in 1957, it was easy for the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) to dismiss us an an amateur skiffle group. Fair enough. But the scheme now presented, including the economic analysis and the elaborate statistical background, is the work not of political amateurs, like myself, but of the best experts in and outside Whitehall.
Perhaps the best way to present the challenge of old age, which this scheme is designed to meet, is to go back 20 years and observe the contrast between the confident expectations of 1948 and the sombre reality of 1968.
By 1948, the Beveridge Plan was on the Statute Book—a cradle to grave system of national insurance from which it had been confidently expected that, at long last, justice would be done to the claims of the retired working population—that every person who duly contributed through working life would thereby earn a decent old-age pension.
Presumably that is an objective which still unites us today. I gather from the terms of the Opposition's reasoned Amendment, that they, too, recognise the rôle of the State in providing, to quote their words,
… a firm guarantee of security in old age … 
But if they agree about the objective, I hope that they will also agree that since 1945 successive Governments have abysmally failed to achieve it.
The first failure—and I admit it freely—was due to our uncritical acceptance from Beveridge of a flat-rate insurance system. This meant that the contributions had to be geared to what the lowest wage earner could afford, so the benefit also had to be geared to the living standards of the poorest section of the community. So, from the start, means-tested national

assistance, which had been planned as the safety net to catch the few who fell through the floor of national insurance, became the normal method by which a great army of pensioners were compelled to supplement an inadequate National Insurance pension after a means test.
During the 1950s, the extent of the failure became even more clear as a result of a new factor: the rapid growth of occupational pension schemes. We were presented ever more starkly with the contrasts between two nations in old age—the privileged nation which, through no merit of its own, but as a condition of employment, became members of good occupational pension schemes; and the underprivileged nation, the unlucky nation, which, through no fault of its own, was working in a job, in industry or commerce, where no superannuation, or quite inadequate superannuation, was provided, and so was compelled, in due course, to apply to the National Assistance Board.
It was this shameful contrast to which we called attention in our party policy document "National Superannuation". Faced with the contrast between the condition of the two nations, we proposed not to level down, but to level up—to create, alongside the private pension sector, a new public sector of earnings-related pensions, an all embracing scheme of national superannuation. That was 1957—a long time ago.
The response of the Government of the time was characteristic. They conceded the need for reform, but then came out with a scheme of their own which added a small graded element to the flat rate scheme. In return for the promise of very modest benefits, the Chancellor scooped up a new source of contribution income and for a time solved his financial problems.

Mr. Stanley Orme: The Tory swindle.

Mr. Crossman: I will not spend time in demonstrating the failure of the 1961 scheme.

Mr. Orme: The Tory swindle.

Mr. Crossman: That is how it has been known by certain people in the past.
I was going on to say that I would not indulge in a long diatribe on it, for the


very simple reason that the Conservatives have admitted the failure of that scheme in the most graphic way open to a political party—by announcing that if they were to get into office next time they would wind it up as quickly as possible. It is true that the funeral obsequies were scarcely audible as they popped the corpse overboard at Kingston upon Thames. Nevertheless, a few of us on this side did just notice the splash that it made.
So we had better face it. Our Beveridge type flat-rate plan failed, and so, much more dramatically, did the Tory successor—the 1961 combination of a little earnings relation and a lot of flat rate.
The extent of that failure is demonstrated in the figures we give at the beginning of the White Paper: about 2 million pensioners—nearly 30 per cent. of the total of 7 million—dependent upon supplementary benefits; above the actual poverty line, about 3 million with incomes not more than £2 above the supplementary benefit level; and the poorest group of all are the widowed pensioners. Nearly half of them are already on supplementary benefit. If we raise the rate of benefit by £1, only one widow out of five would be above the supplementary benefit level.
So I do not think that I was exaggerating when I talked of the two nations in old age. They existed when the Labour Government fell in 1951. Thirteen years later, when we took power once again, the contrast was even sharper. I will illustrate it by one figure. The old today comprise 14 per cent. of the nation. They have 9 per cent. of the nation's income, and 2 million of them have an income below the minimum guaranteed by the Supplementary Benefits Commission. That is the social problem that we have to face. In my view, it is the greatest challenge to the nation's conscience in our generation.
We can tackle it only if we divide it into two parts and deal with those two parts separately. The first priority is to do justice to existing pensioners. The second priority is to prevent repetition in the next 20 years of what happened in the last 20 years from 1948 to 1968.
I make this point early on in my speech, because one of the main criticisms of the White Paper so far has been the

complaint that it does not do anything for existing pensioners. My answer is quite simple. This White Paper is not the first priority. Our first priority, ever since we took office in 1964, has been to make sure that, whatever the economic difficulties may be, we give a fair deal to the existing pensioners. We started, despite all the perils of that first winter, with the biggest increase in the history of the old-age pension.
Stage 2 was what I can call the Herbison reforms of 1966, which laid the foundations for our promised income guarantee by abolishing the National Assistance Board and establishing a Supplementary Benefits Commission so completely reorganised and effectively purged of the old stigma of the Poor Law that no less than nearly 600,000 new people have claimed entitlement from it. That is one of the greatest achievements, and I think that my right hon. Friend the Member for Lanarkshire, North has a great deal of which to be proud. The more I think of the work of that Commission and the change that my right hon. Friend created, the more I think that we can say to existing pensioners that we did not start a long-term plan for the future; we started by doing the job that we promised of looking after them.
I claim that we have done more for the existing pensioner, and done it in greater economic difficulties, than any other Government. It is because we are already fulfilling the first priority pledge to them that we have the right to come forward with concrete proposals for ensuring that the next generation of pensioners during the next 20 years is not subjected to the injustices which the last generation suffered, and which we have to remedy by makeshift methods as best we can. It is not a case of excluding existing pensioners from our new scheme of earnings-related contributions, because by definition one cannot be a member of an earnings-related scheme if one has not paid an earnings-related contribution. What existing pensioners need now is not a brand new scheme for the future, but value for money straight away.
There is one thing which they get out of the new scheme, and that is the guarantee that all pensions, including theirs, will be reviewed regularly every 24 months, and as a minimum proofed


against inflation. In the past, each increase of pension has involved the cumbersome machinery of getting legislation through both Houses, and the average gap between each increase has been 30 months. We shall reduce the gap from 30 to 24 months, and we shall make the reviews a statutory requirement which will not require a new Bill on each occasion. That should help quite a lot.
There is a second general criticism of the White Paper which I must deal with before I come to discuss some of its distinctive features, and it is to be found in the terms of the Opposition Amendment, which says
that the widespread desire to provide additional pensions related to earnings and individual needs can best be achieved through private and occupational pension schemes.
When I first read that I thought that right hon. and hon. Gentlemen opposite had fallen into the same error as The Times which, in a leading article the day after we published the White Paper, solemnly urged a system of compulsory fully transferable private pensions as The Times alternative to national superannuation.
I need hardly tell the House that that is a totally futile idea. The idea of making a collection of what are now 65,000 private schemes, with every possible variety of condition, fully transferable is impracticable, as the report of the Ministry of Labour's National Joint Advisory Council showed the editor of The Times eight months ago. As for the project of compelling every employer, large and small, to insure all his employees in a private scheme, that would require the creation of a huge army of State inspectors to police what would have grown to about 1 million private schemes to ensure that they were all guaranteeing their members a decent pension, and that they were all transferable. If the schemes were not policed, there would be no assurance that they were giving the kind of security that we require.
Long before The Times put forward its futile project it had been ruled out as impracticable by every serious pension authority, and I think that I observed the other day, outside the House, that the Opposition spokesman also believed

that the compulsory occupational pension scheme was an impracticable concept. I was grateful that on that occasion we saw eye to eye. If the hon. Gentleman agrees with that, I think he has to admit that if we forgo compulsory private schemes there will always be about one-quarter of the employed population who cannot be covered by private schemes, and I suggest that those who framed the Amendment know this very well, if only because they tried for 13 long years to make these schemes a genuine substitute for national superannuation, and their failure demonstrated the impossibility of the project.
I put it to the House that the only alternative to our proposal for national superannuation is a tacit acceptance of the permanent existence of the two nations in old age, an acceptance that when everybody is covered by private pension schemes who possibly can be there will always be at least one in four of the employed population without private cover and compelled by poverty to accept supplementary benefit.
There is one thing which has always impressed me about the Conservative establishment, and that is its ability to accept as an inevitable social tragedy something which in due course the next Labour Government renders unnecessary. Year in, year out, during the 1930s, for example, they preached the inevitability, in a healthy free economy, of mass unemployment. I remember a speech of Neville Chamberlain's, when he expressed his gratitude to the permanent unemployed for accepting so quietly and patriotically the rôle inevitably allotted to them by the normal working of a free enterprise economy. After the war, under a Labour Government, this mass unemployment was shown to be completely unnecessary, so its inevitability was quickly forgotten by Conservative spokesmen who had begun to believe in full employment.

Mr. David Lane: Before the right hon. Gentleman leaves the inter-war history, may I ask whether he agrees that the highest level of unemployment was reached during the term of office of a Labour Government?

Mr. Crossman: No. I think that it was about nine months after the Labour


Government fell. I do not think that we should go into the details of pre-war history.
I was coming to a new inevitability which has become fashionable. When we complained, in the 1950s, about the social injustice of condemning millions of retired workers to national assistance, we were told that provision for old age was best left to private insurance companies and to private occupational pension schemes, and if this means that about 2 million people get left out, well that is the price that we must pay for relying on the private sector to do the job. That is not a price which we on this side of the House are prepared to pay, and I do not believe that the people of the country are prepared to pay it, either.

Sir Harmar Nicholls: The right hon. Gentleman was making a party point about the Tories and about the inevitability of unemployment. Can he say what Lord Beveridge thought was the position in those inter-war years?

Mr. Crossman: I think that he thought that we ought to insure against the 3 per cent. level, but that is not the 7 and 8 per cent. that we were having, or the mass unemployment in certain districts which we had during the war.
I want to turn, now, to the last sentence of the Amendment, in which the Opposition object to our scheme on the ground that it
adds yet further to the burden of taxation on individuals and industry.
On these words, I have two comments to make. First, as the hon. Member for Hertford (Lord Balniel) knows, under our scheme the burden on the taxpayer remains the 18 per cent. of the total contribution that it is today. Because of the needs of other social services on the taxpayer—for obvious reasons I think of the Health Service—we have been careful to limit the size of the Exchequer contribution.
What does the Amendment mean by talking about an increased tax burden? Does it imply, without daring to state it openly, that Opposition leaders have abandoned altogether the idea of contributory insurance and now lump contributions and taxes together as compulsory deductions from the pay packet? I do not deny that this is the reaction of many

people today to the present flat-rate system. I agree that contributions are increasingly regarded as tax, as an unjust tax, as a poll tax on the poor. It is precisely this feeling which wrecked the Beveridge Plan by undermining faith in the contributory principle.
But are hon. Gentlemen opposite saying that because the flat-rate contribution is widely regarded as a mere tax we should now treat the whole idea of national insurance as hypocrisy, that we should assume that sickness benefit and old-age pensions are paid for out of taxation, just like health and education?

Lord Balniel: The right hon. Gentleman will remember that his description of the contribution was that it was an evil poll tax. In the past the flat-rate contribution has been a poll tax and he is transforming it into progressive direct taxation.

Mr. Crossman: I am glad to have got the hon. Gentleman to his feet so quickly to state the Opposition's view that there is not, and cannot be, any difference between a tax and a contribution.

Lord Balniel: I stated absolutely nothing of the kind. I stated that the right hon. Gentleman himself described it as a tax and that this is a levy, or whatever phrase one may use—a contribution or a tax on incomes.

Mr. Crossman: Certainly, and, therefore, we both agree that the present system of flat-rate contribution is widely regarded as a tax and is felt to be a tax. It is because people feel it to be a tax that we are determined to transform the system, to reinvigorate the contributory principle and make it work, so that everyone knows what is taken each week as his or her real contribution, to the pension—and not a tax—and knows that it really does contribute to his or her personal earnings-related old age pension.
I am grateful to the hon. Gentleman, because this is one of the points of the central debate between us this afternoon, whether or not this is a practical proposition. I am glad to hear what he has to say on the subject. If we can do it—and I am sure that we can—we are giving the best possible incentive to savings, because one of the things that has been wrong in this country over the last 20 years has been the growing feeling among


working people that the man who contributes from his wages all his life and saves what he can is often no better off that the man who just looks forward to supplementary benefit.
This undermining of the contributory principle has helped to undermine the belief in savings. All who are concerned with occupational pension schemes and national savings are paying serious attention to our proposals. They at least realise that the only sound foundation for private insurance and national savings is a really sound comprehensive earnings-related Government pension plan, a really sound plan.
We come next to finance and economics. How will national superannuation be financed and what burden will it impose on the economy. Let me start with the contribution. A contribution of 6¾ per cent. on both sides should be sufficient for 10 years at least—but that depends on the extent of contracting out—to finance the improved rates we propose for existing and future pensioners. Some people have pounced on the fact the employer pays on his whole payroll and not merely up to the employees' earnings ceiling, and have accused us of putting an unfair burden on industry. In fact, we have been over-scrupulous in avoiding overloading industry.
I have often been reminded by my hon. Friends that in almost every country in Western Europe the employer pays a far higher proportion of social security costs than we are proposing for British employers. We resisted the temptation to bring Britain in this respect into line with the Common Market largely because we realised the importance of exports in achieving a surplus in our balance of trade. Instead, we decided on a precise 50–50 division of responsibility; and the fact that the employer pays on his whole payroll without a ceiling—which has great administrative advantages for him as well as for us—is set off by making his national superannuation contribution one quarter per cent. lower than the employee's.
Before Opposition spokesmen tell me that we have added £600 million to the cost of social security, I suggest they calculate how much the contribution would have had to go up anyway over

the next 15 years if, instead of our new scheme, we simply continued uprating the old scheme at the pace we are used to. The Bill is there. The question is how to raise and distribute the money.
I turn now to employees. How will their 6¾ per cent. be divided? We have decided to establish two separate funds. The social insurance fund will cover short-term benefits, unemployment, sickness, industrial disability etc.; and 2 per cent. of the combined contribution has been allowed for this, including something for the National Health Service. The remaining 4¾ per cent. will be allocated exclusively to pensions so that a surplus on national superannuation will not be available to finance, for example, extra sickness benefits caused by an influenza epidemic. Contributors must be able to know for certain that the 4¾ per cent. paid each week towards pensions really goes to pensions.
It is all more important that they should be certain of this because we have decided in one important respect to diverge from the policy we preached in opposition. Instead of a properly funded scheme we have adopted the modern method of financing first developed by the Germans before the war. When the Americans first evolved their social security system they thought, like us, that the accumulation of a fund was needed. But the current burden on the worker as well as the employer pressed overwhelmingly. The contributions became high and they moved on to a system of finance such as we are proposing, where outgoings are strictly covered by contributions. This has received the nickname "pay-as-you-go".
When we evolved our blue-print, when we were in opposition 11 years ago, this technique had not been fully developed and I freely admit that its acceptance by the right hon. Member for Kingston-upon-Thames in 1959 was a decision whose virtuous nature I failed to appreciate at that time. "Pay-as-you-go" has run satisfactorily since then and we do not propose to change this aspect of national insurance. Indeed, I am convinced that in the foreseeable future the proper relationship between the public and the private sector in the field of pensions is for the public sector to provide a "pay-as-you-go" scheme as a


sound foundation for saving and the occupational schemes to do the actual saving through their funds. This is one aspect of the partnership about which I shall have more to say a little later.
Though our scheme will not be funded at all, we have fixed the contribution levels for the first ten years so that we can anticipate a modest working surplus. One reason we made this somewhat larger than normal was to cover the cost of contracting out which is not included in the calculated cost of the scheme, at the end of the White Paper. The surplus is considerable. The correct investment policy for a Government scheme's working surplus is, of course, very different from the correct investment policy for a private pension fund. Nevertheless, I have been asked whether this working surplus, like that of the present National Insurance Fund, will be invested solely in gilt-edged securities. Indeed, the assumption that we shall do so has provoked fairly widespread criticism not only from my hon. Friends behind me but, paradoxically enough, from such impeccable establishment pundits as the Economist.
Let me reply to these critics. From the pensioner's point of view there would be no advantage in equity investment because pension rates will be fixed by our 60 per cent./25 per cent. formula and will not depend on the yield or the market value of securities held in surplus; and there would certainly be difficulties for government financing, too. But I am glad to be able to add that we are willing to reflect on any arguments presented in this debate and elsewhere in favour of investing part of the working surplus in equities and having a broadly based portfolio.

Mr. J. T. Price: I am obliged to my right hon. Friend for giving way at this point. Surely, all these assumptions are based on the proposition or idea that the total of 5¼ million people presently contracting out of the Health Scheme of 1960—the graduated scheme—will not increase very much. Many people, including myself, have the impression that the numbers might be far greater than that and the surplus would then disappear completely.

Mr. Crossman: That is a possibility, but it depends entirely on the negotiation

of the terms. That is all I have to say on finance and I turn now to the scheme itself.
To save the time of the House I will concentrate on only four features of the scheme which markedly differentiate it from——

Mr. James Dickens: Before my right hon. Friend leaves the question of the Exchequer contribution, are we to take it that the figure of 18 per cent., which is a very low figure, is immutable, and that over the years, even if the tax structure changes, we cannot increase the Exchequer contribution and thus make a scheme much more redistributive in terms of the distribution of wealth in the country?

Mr. Crossman: We can do nothing to bind a future Government in respect of the Exchequer contribution. We have based our White Paper on the basis of an 18 per cent. Exchequer contribution for the first 20 years, to be modified as rates can be modified elsewhere.
I turn now to the elements which differentiate our scheme. First, on the earnings relation, in retrospect the most surprising defect of the Beveridge Plan, in which we all shared—we were blind—was the static concept of subsistence, its failure to realise that what we mean be an adequate pension is not so many pounds, shillings and pence, or so many calories, or such and such items of expenditure, but a standard of living for old people comparable with that which they had when at work, and that this standard of living in our modern technological age must be not a fixed thing but constantly rising.
A few years ago, a radio set first became part of a pensioner's essential living standards. Now, almost everyone feels that a television set is essential, and, in the next 10 years, for those who feel the cold, like myself, in unheated houses, another essential will be double-glazing and central heating. To ensure to old people a fixed living standard in a period when the working population is forging ahead year by year is to condemn them to permanent second-class status. In our party policy statements we formulated this in the phrase:
The old must share fully in rising national prosperity.


And there is something else. The old are not a faceless conglomerate of statistics. They are individuals, each of whom has achieved at work his own living standard and for each of whom social security means maintaining as far as possible the standard he earned, during working life, in the years of retirement. That is another reason why flat-rate pensions, even with a small earnings-related increment, are intolerable in a civilised community. Each of us requires an old-age pension not imposed on us as a piece of rigid equalitarianism but carved by our weekly contribution and, therefore, a reflection of our achievements in working life.
Our second requirement, which we did not get either from the Beveridge scheme or the Boyd-Carpenter scheme, is a pension entitlement responsive to changes in the level of wages during the years in which we were building up our pension rights. The trouble about the 1961 scheme is that the 6d. "bricks" that we earn with each £7 10s. of contributions will still be worth precisely 6d. 30 years later, when the equivalent money value may be 1s. 6d. or 2s. and standards of living have also advanced. One of the most important features of our new scheme is the arrangement under which a contributor's cash earnings in each year will be revalued to bring them into line with changes in average male earnings. This will continue year by year until he reaches pension age.
We all know that a life insurance policy which promises £1,000 after 30 years is not much good unless it is a cum-profits policy. In our scheme, we have arranged the national equivalent of a commercial profits policy. Each contributor will receive, every second year, a slip giving him the amount of his entitlement, from which he will be able to see not only how much pension right he has acquired to date, but also how his contributions in previous years have gone up in value to keep pace with the increase in average wages.
Let me say straight away that, for white collar workers, particularly for executives and public servants, this calculation, based on life earnings, which is a very elaborate system, will make very little difference. We should not have introduced it if all our pensioners were white collar workers.

Their pensions are related to their final salary, which is advantageous, because they reach their highest earnings towards the end of their life. But an industrial worker with a pension based on final salary is frequently cheated of his rights because his peak earning period was 15 years before. He needs not a pension calculated in terms of 6d. "bricks" but a pension entitlement revalued throughout his working life.
A number of people interviewed by N.O.P. in the Daily Mail were afraid that the value of their contributions will decline before a pension is received. That merely shows that they have not read a copy of "Pensions—The Way Forward", the pamphlet in which, if I may praise my collaborators, our White Paper has been brilliantly condensed for one shilling.
What about the fall in the value of money after the pension has been awarded? That is something about which members of most occupational pension schemes complain most bitterly and most employers find it impossible to deal with the complaint. But it is dealt with in our scheme by the biennial review.
I turn to the third important difference between our scheme and present methods. National superannuation—I emphasise this particularly—is not merely a private occupational pension scheme rewritten in national terms. Indeed, it is based on a redistributive principle which distinguishes it sharply from any kind of life insurance or private scheme. The private scheme, in return for a single percentage contribution, pays a single percentage benefit, the same for everyone. Our national scheme—in this, we follow a number of democratic countries, including the U.S.A. and Sweden—introduces a redistributive element which weights the benefit in favour of the lower-paid worker.
The contributor will get 60 per cent. on earnings up to half average national wages and 25 per cent. on earnings above that point. This banding deliberately ensures that, whereas the below-average worker gets more than half pay on retirement, the above-average worker gets less, and sometimes considerably less. The other day, one of the Daily Mail's most distinguished financial pundits, Miss Margot Naylor, made a sensational discovery. She discovered this redistributive element and called it the secret that we were trying to


conceal. I was a little disappointed, because, so far from hiding it, we put it in Chapter 2 of the White Paper as one of our eight basic principles, and we illustrated it in our examples.
Our prime aim is in 20 years to enable virtually everyone to earn a pension above the supplementary level, and this can only be done by a banded pension formula such as we have produced. Whether we have the weighting exactly right is something on which we are prepared to take into account the views not only of the C.B.I. and the T.U.C., but of others, including the opposition parties—always remembering that the less we weight the formula the more lower-paid workers will remain below the supplementary level.
The fourth innovation is our new deal for women. It is clearly laid out in the White Paper and I will make a brief reference to it later.
Having announced these four big innovations, I now turn to one or two of the misconceptions about the scheme which have grown up. I am thinking on one in particular, because of a campaign mounted by the Daily Express and its provincial ancillaries to create the impression that nearly everybody will pay more from the start and no one will get anything much until 1992. In fact, the first earnings-related benefits will be paid exactly 12 months after the first earnings-related contributions are paid in. Anyone who is 64 when the scheme starts, and who pays 12 months of contributions, will qualify for a pension made up of 19/20ths of the old scheme and 1/20th of the new scheme.
Anyone who retires after two years will get 2/20ths, and so on, until a contributor with 20 years' new scheme contributions will get the full earnings-related pension in 1992. But the scheme will start paying out 12 months after the first contributions.
Another misconception to which Daily Express readers have been subjected is that the pension rates printed in our White Paper, which are said to be miserable value for money, refer to what will actually be paid in 1992. In fact, the tables relate not to the next 20 years, but to the last 20 years. Because we were determined not to promise pie in the sky—or to try to guess how the

economy would move in the next 20 years, or try to predict in a White Paper the rate of industrial growth and the rate of interest over 20 years, which are the estimates which must be made—we preferred to take facts, what we knew had actually happened over the last 20 years, and what pensions people actually got. We assumed that our scheme had come into operation in 1948, so that the first full pensions were payable in 1968.
We know that, for instance, an employee with an average wage of £6 14s. in 1948, when he retired in 1968, received £4 10s. If our scheme had been in operation for those 20 years, his entitlement would have been not £4 10s., but £9 7s., or, for a married couple, not £7 6s., but £12 3s. This is the difference between the prospects which will face the average wage earner in the 20 years after the appointed day of our new scheme and what has actually happened to the wage earner between 1948 and 1968.
The last important objection which I frequently hear is that the higher-paid contributor will get far worse value for money by paying his increased contribution than he would if he invested the same amount in a private insurance policy. I met an accountant the other day who keenly resented the fact that, being self-employed, he was not able to pay both sides into the scheme. He knew what he was talking about and appreciated the value of the scheme.
The cash benefit to the single higher-paid worker when he retires may be less than the cash return of an insurance policy. But to say this does not by any means complete the comparison because in our scheme the contributor gets a number of additional important benefits which are not available under a private insurance policy. I will list five of them.
First, if he is married and his wife does not go out to work, she will draw a dependent wife's allowance. This, I believe, is unheard of in private insurance. In 1968 values it provides the family with an extra £2 16s. a week. Secondly, he knows that his full earnings-related pension will be paid for life to his widow, and that is something which virtually no private insurance policy gives. Thirdly, he can look forward to a statutory review every 24 months which provides a 100 per cent. guarantee against inflation for him and for his widow. What


private pension scheme does that? Fourthly, if he is 45 he can qualify for his full pension in only 20 years. I have heard of few private schemes which provide such early maturity.
Fifthly, transferability. In our scheme, however often he changes his job, he—that is, everyone—carries his pension rights with him and they are completely revalued year by year. This is a right which, apart from the Civil Service and the nationalised industries, virtually no employer can offer to members of his occupational scheme. Today, the best one can normally hope for when one changes one's job is to lose all one's employer's contributions and cash one's own for a lump sum. Only about 10 per cent. of private schemes today provide some degree of preservation of their employees' rights.
Frankly, we regard this position as intolerable. It is intolerable economically, because an economy where no one after middle age dares to move for fear of losing his pension rights is a frozen, immobilised economy. It is intolerable morally, because it keeps the middle-aged employee tied to his job and so denies him ambition and promotion. National superannuation in itself will do a great deal to improve this position by providing to everyone an adequate earnings-related pension which can be carried from job to job.

Mr. Woodrow Wyatt (Bosmorth): Is my right hon. Friend aware that for at least four-and-a-half of the five points which he has listed the scheme which I operate in my printing works meets every one of his objections? Would it not seem that he is totally misinformed about private schemes?

Mr. Crossman: I am sure that all hon. Members look forward to my hon. Friend's speech. I hope that what he says is true, but I have based my remarks on the advice I have received. I have had a good deal of contact with the life offices and occupational pension schemes. I would be surprised if my hon. Friend is a statistically relevant employer.
We have also been concerned to help the higher-paid worker who will normally combine a public and private entitlement. We should have liked to

make all private pensions fully transferable. We have decided in the first instance to include in the Bill a part which gives to the employee the right when he leaves his job to choose between cashing his own contribution or going to his new employer carrying with him his full pension rights preserved.
There are people who urge that preservation should have been made compulsory—that it should have been declared a crime to get a lump sum at the cost of forfeiting half of one's entitlement. I feel very strongly that our national superannuation should render this compulsion unnecessary.

Mr. J. T. Price: My right hon. Friend is making a powerful speech, but before leaving the question of entitlement to pension, and considering that all these arrangements are spread over a lifetime, would he explain how this will affect some manual workers? Will there be any adverse effect on the final pension for those manual workers who, for considerable periods, have broken employment? Since they will have been unemployed for periods during their lives, will this scheme act to their disadvantage?

Mr. Crossman: This problem of credits for periods of unemployment—we must consider sickness in this problem, too—has been carefully examined. My hon. Friend will find in the document which has been published what we propose to do. A credit will be given for a period of sickness or unemployment at half the average male wages. This is the best we can afford right now, and this modest credit should overcome much of the difficulty.
My last major topic is the relationship between national superannuation, on the one hand, and the 65,000 occupational pension schemes, on the other. I have already explained why we cannot rely on the continued growth of these schemes to eliminate the division between two nations in old age which produces a great mass social injustice. I have also shown how our national superannuation differs from private superannuation and summarised the five benefits which national superannuation can give to its members and which private schemes cannot, of their nature, provide.
Nevertheless, private schemes also have their advantages. In particular, they can be tailor-made to suit the needs of individual firms in a way that no comprehensive national scheme can hope to achieve. And there is something else; the funded private schemes are a most valuable form of group savings and many hundreds of thousands of workers in industry, business and the public service regard them as a guarantee of their security in old age. I doubt whether many school teachers, many policemen, many workers in Esso or I.C.I. would throw their hats in the air if I announced that we had decided to wind up all private schemes and substitute a single State system.

Mr. Orme: Is my right hon. Friend aware that because of the high percentage of their earnings which they must contribute many teachers are highly critical of their scheme?

Mr. Crossman: Nevertheless, I have not heard of a teacher who would prefer his scheme to be wound up. He might like it varied by 1 per cent. or 2 per cent., but teachers appreciate the value of their pension scheme and do not want it to be wound up.
Whatever some of my hon. Friends may say about this being a mark of a really Socialist Government, in the sphere of social security, as in housing, I believe that partnership between the public and the private sector is essential to satisfy a variety of demands. The nation would be very much the worse if we arranged things in such a way that we must either all be council house tenants or owner-occupiers. What the community needs is the right balance between these two kinds of housing and in just the same way what we need in social security is a partnership between the public and the private sector. That was our view in 1957 when we published "National Superannuation", and nothing has happened since to change it.
We have decided to construct the State scheme in such a way that private schemes which are willing and also strong enough to do so can partially contract out. As I have said, we were able to rely in the latter stages on the technical advice of pension experts from the life offices and the National Association of Pension Funds and it is thanks to their assistance that I am able to assure the House that

the form which we propose this arrangement should take is technically feasible.
Firms which contract out will continue to pay the 2 per cent. into the Social Insurance Fund and they will also continue to pay a substantial part of the 4¾ per cent. for national superannuation. But a small part of that 4¾ per cent. will be remitted for the employee and a similar proportion for the employer in return for a firm guarantee of an equivalent pension paid by the firm. Both we in the Ministry and those who represent the private insurance sector are agreed, as I say, that this system of abatement is not only the most desirable but also the most practicable method of cementing a partnership between the two sectors.
I observe that the Opposition have alluded to contracting out in the latter part of their reasoned Amendment. They decline
… at this stage to approve a plan which leaves unresolved the crucial question of contracting out….
I hesitate to imagine how they would have phrased their Amendment if we had resolved this crucial question before consulting the House of Commons. Nevertheless, I appreciate their difficulties. They have an uneasy feeling that the negotiations which have already begun may well result in a firm agreement between the private schemes and ourselves. How wise, therefore, to avoid either approving or condemning the plan and to prefer the cautious policy of refusing support until they are sure what is to happen.

Lord Balniel: Would the right hon. Gentleman now answer the question which he refused to answer when I put it to him earlier in the week? Why will he not write the terms of contracting-out in the Bill before presenting it to Parliament?

Mr. Crossman: Naturally, any public agreement will be written into the Bill or the Order in Council in some form or other. I will not say whether it will be in the Bill or in the Order in Council. The question of what figures will be written in is a highly specialised one which I shall not answer today. [HON. MEMBERS: "Cautious!"] Yes, it is cautious. The caution of hon. Members opposite is a stance which might seem to an ordinary man ambiguous. It is an ambiguity we have learned to know and


appreciate as the Opposition's inveterate ambiguity on a score of such subjects as prices and incomes and race relations.

Mr. Paul Dean: Can the right hon. Gentleman give an assurance that if the surplus which he expects to build up in the early year is, in the event, not as great as he expects, he will not then alter the terms of abatement to the disadvantage of the previous arrangement?

Mr. Crossman: I think that, off the cuff, the calculation that would affect the contributions to the scheme, not the terms of the agreement with those who contracted out, would be something we have to consider now. For instance, we have now a demand from those inside the scheme that the present graded element should be dynamised. [Interruption.] I said that hon. Members opposite are cautious about approving or disapproving the scheme. It is nice of them to be so kind.
I turn, finally, to our Motion and to say precisely what we mean when we ask the House to approve the White Paper as a basis of legislation and invite the Government to continue consultations. In answer to a question, I have described the White Paper as a White Paper "with green edges". What I mean is that the Government are firmly committed to the main structure of the scheme, but there are a whole number of secondary features in it and a whole set of related figures which are open to suggestion in the sense that they can still be revised and modified in detail before we finalise the Bill.
I will give a few examples. First, the retirement condition and the earnings rule. If I were to express a personal view I would say, if I were a completely free agent, which I am not, that I would rather have a scheme with no retirement rule at all and no earnings condition. There are, however, two difficulties. In the first place, this would cost about £115 million a year extra—not £150 million as the White Paper says, which is the only misprint I have found. In the second place, there are serious anxieties in the trade union movement about the danger of using pensioned workers to undermine wage rates. Nevertheless, this is an area where we would welcome discussion and where modifications are still possible.
My second example of a passage with "green edges" is the treatment of women and widows. The proposed abolition of the married women's option, while it would be welcomed in general by women's organisations, will be disliked by many married women. On the other hand, we have left the women's retirement age at 60 despite the admission by most women's organisations that this is an anachronistic concession to what is no longer the weaker sex. This is an interesting question on which we are prepared to listen carefully to public opinion.
On other areas of the scheme we would like to hear an informed and vigorous public discussion in order to ensure that we have got the balance right. For example, we propose a 20-year maturity period which, to put it brutally, means that the young will pay substantially more so that those over 45 can get the full pension more quickly. Have we tipped the balance too far in favour of the older generation?
There is one issue which I have not yet mentioned, the question of the earnings ceiling beyond which contributions will not be paid and benefits earned. We have put it at one and one-half times the national average of male earnings. Here again, we had to strike a balance between the scheme's need to include a substantial number of better-off contributors and our desire to leave the private pension schemes to cater for the highly-paid workers, their traditional customers. We think that £33, in 1968 terms, is about right, but on this issue we shall certainly listen with attention not only to the C.B.I. and T.U.C., but also to everything said in this debate.
I saw it suggested in one Sunday newspaper that this White Paper would be an ideal subject for a pre-legislation Committee. Personally, I could not conceive of anything more worthy of Specialist Committee investigation than the plan outlined in this White Paper. But that, of course, is a matter for the House. Meanwhile, I would hope that the debate which we are starting this afternoon in this Chamber will be continued throughout the spring and summer not only at Westminster, but up and down the country so that public opinion can be not only alerted but also informed about our plans. For one thing seems to me clear.


A radical reconstruction of national insurance such as we are putting before the House today can only be successfully carried through in the climate of an alert and a constructively critical public opinion.

4.56 p.m.

Lord Balniel: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
recognises the rôle of the State in providing a firm guarantee of security in old age, but believes that the widespread desire to provide additional pensions related to earnings and individual needs can best be achieved through private and occupational pension schemes; and declines at this stage to approve a plan which leaves unresolved the crucial question of the contracting out arrangements for occupational schemes and which adds yet further to the burden of taxation on individuals and industry".
The House has been greatly indebted to the right hon. Gentleman the Secretary of State for a speech, parts of which were thoughtful and parts of which were interesting, but which, I think he will take it as a tribute to his debating prowess, contributed to enlightening us on certain aspects of the White Paper yet hardly touched on the heart of the major debate and left in total obscurity the future of private and occupational pensions schemes.
Before embarking on discussion, we ought also to congratulate the draftsmen of the White Paper. Anyone who is not an actuary or insurance expert has to undertake a very conscious mental effort to understand the complexities of any pension scheme. I suspect that most laymen adopt the jargon of the insurance experts and are inclined to "opt out" of understanding it at all.
The right hon. Gentleman looks very snug indeed in the mantle he has inherited from my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). It is certainly true that he has unstitched what was called the Boyd-Carpenter Scheme. It is more voluminous. It covers more people, not only those who earn up to £18 a week but those who earn up to £33 a week. But he has incorporated precisely the same principle whereby the graduated payments used to secure earnings-related benefits are used overwhelmingly to pay for the existing pensions.
The difference lies primarily in the scale—in the fact that the Government are now moving into a field which is well covered by occupational schemes. The difference lies also in the fact that in the previous scheme each persons' individual contribution bought the same value of pension at the end. Under the Government's scheme the harder one works and the more one earns, the less is the value of one's contribution—a theme of redistribution which I should have thought more suitable to the medium of taxation than insurance contributions. It is also a theme of redistribution incorporated into insurance which I suspect does not conform with the mood of the country.
I agree with the right hon. Gentleman straight away that the greatest challenge which this country has to face, the greatest challenge to the social conscience of this nation, is the care we devote to our old people. The Government, with self-congratulation, claim in their White Paper that they are making a fundamental change in the scheme. It is quite true that they are shaking it up. It is like those glass toys which are filled with artificial snow. It has been given a tremendous shake. There is an absolute blizzard of financial movements and adjustments. It is almost impossible for the layman to see what is happening but, as the snow gradually settles down, many of the old familiar landmarks with which we are so well acquainted from the past gradually re-emerge.
There are three elements which make up the Government scheme. Three elements which are, unhappily, fairly difficult for laymen to disentangle. The first is the contributory element, under which each member acquires an asset by virtue of his or his employer's contribution. This part of the scheme corresponds to the scheme of my right hon. Friend, the 1961 scheme. It also corresponds to the principle underlying private occupational schemes, although in their schemes there is an element of genuine saving for the future. In this scheme there are no real savings at all.
The second element is the redistributive element which is in the nature—let us put it quite bluntly—of charity. This element is designed to transfer the purchasing power from the better paid in the


community to the lower paid without regard to their contributions but with regard to their needs. This is the new element in the contributions. In the past there has always been an element of redistribution, but this has been incorporated in the tax contribution—not the personal contribution.
There is the third element, the variable element, by which the whole scale of benefits is adjusted upwards to take account of the rise in prices every two years. This is putting into statutory form what has been the regular practice of previous Governments.
The subject is immensely complex.

Mr. Ted Leadbitter: The right hon. Gentleman must make it clear that the graduated pension scheme, known as the Boyd-Carpenter Scheme, had two basic differences. That scheme did not take growth into account nor could it be controlled in an area of inflation.

Lord Balniel: I will deal with those two points in my speech. Perhaps I might be allowed to do so in the way I had planned.
As I was saying, this is a subject of such immense complexity that I shall try to set out at the very beginning the broad objectives of financial social policy for the elderly which I believe this country should follow. The broad objective of social policy for the elderly is to secure for them a decent standard of life. For far too many people today the disparity in the standard of life before retirement and the standard of life after retirement is too great. To diminish this disparity pensions must clearly be made to correspond more closely to earnings. The question is whether this task of providing a pension in the future above basic levels and related to earnings is primarily a task for the State to meet out of taxation—because that is what contributions are and that was the point I was making in interrupting the right hon. Gentleman—and out of current production, or is it primarily a task for the private, personal and occupational pension schemes to provide out of real savings for old age?
The Conservative Party stands for the belief that it is in the best interests of

the country and of the pensioners that the State should concentrate on providing a firm background of security in old age. This should be the prime task of National Insurance—to guarantee a basic security for old people, for the sick, for the disabled, for the unfortunate, for the widowed. When I speak of a basic security I speak not only of avoiding absolute poverty but in terms of avoiding a sudden drop in living standards when one retires.
Additional provision over and above basic security can best be met more effectively, more flexibly by private and occupational schemes.

Mr. Crossman: I am following closely. It was clear that the hon. Gentleman said "basic security", but did he say that the basic security is related to one's earnings or to the standards one achieves in life? If so, basic security is not something which is the same for everybody. Is not that what we are doing? Once he relates the basic security to earnings the hon. Gentleman is adopting our position.

Lord Balniel: I was not adopting the righ hon. Gentleman's position. I said I accepted it was not only the responsibility of the State to provide against absolute poverty; it was to provide against the sudden drop in living standards when one retires. I accept that there are arguments which lead to a relationship between contributions, benefits and earnings. In a free society our aim should be to encourage everybody to supplement their pension through their own thrift and forethought, by means of occupational pensions schemes. We question whether it is wise for the State to bulge over into the business of raising extra taxation and contributions to provide benefits for the better-off members of the community, over and above basic needs.

Mr. John Pardoe: I am trying to follow this complicated matter. What the hon. Gentleman is saying is crucial to the Conservative policy. Is he saying that any part of the State scheme should provide a pension that is linked to the individual's previous earnings or only to the overall level of earnings of the community?

Lord Balniel: If I understood the hon. Gentleman's question aright, my answer


would be that I am saying that there should be a relationship between the pension and a man's earnings in his working life. I am going to refer to the question of redistribution during the course of my speech.

Mr. Crossman: rose—

Lord Balniel: For goodness sake.

Mr. Crossman: I answered 10 or 11 questions. It is most important that we should clarify each other's thoughts. The hon. Gentleman said, first of all, that the State's job was to deal with basic need. It is now clear this does not mean a flat-rate standard of living; it is a need related to one's earnings in life. Then he says that we should not bulge into the provision for higher-paid workers. Does he mean that there should be a level drawn and that the State should provide for workers below a certain level related to their earnings but not above a certain level? All the hon. Gentleman is saying is that there should be a ceiling to national superannuation, which we have already. Where does this differ in principle from what we are doing?

Lord Balniel: I am saying the State should only provide a basic level of security, a firm background of security, but I accept the argument that the State can be enabled to provide against a sudden drop in earnings when one retires. I equally accept the argument of the 1961 scheme, that one should be able to contract out from that element of it and obtain better terms under the private and occupational schemes. If the State bulges outwards, if it balloons out, it harms the prospects of the 12 million people in private and occupational schemes, many of which give a much better bargain than the State scheme. I am not saying that all private schemes are perfect and immaculate. However, if one asks any employee whether he would prefer to invest his savings in a State scheme or in an occupational scheme, they would choose overwhelmingly to invest their savings in occupational pension schemes. How right he would be when he remembers how the investment in War Loans and in Daltons has gone. How right he would be when he sees that the market value of the National Insurance Reserve Fund has dropped from £188 million in December, 1964 to £88 million in December, 1968.
The State must provide for existing pensioners; for those who are not properly covered by private and occupational pension schemes; and for those who will not be provided for in the immediate future. So, like the right hon. Gentleman, I agreed that there must be a partnership between the State scheme and private and occupational schemes.
Private schemes can provide against pre-retirement inflation but, although many of them provide against post-retirement inflation—this is the ideal to which most of them are moving—they cannot provide a contractual right to do so. As it is possible for a firm to go out of business, it is essential in the private field that there should be a contractual right to provide the pension. Nor, for that matter, can the State provide a contractual right to a pension in the future.
It is misleading of the White Paper to say that occupational pensions do not provide post-retirement increases. The Government Actuary's Report of December 1968 showed that more than half of the schemes in the United Kingdom do provide post-retirement increases. The main obstacle to full post-retirement increases in the private sector is the Inland Revenue restriction to 2½ per cent. for contractual increases. As 3½ per cent. has been the average rate of inflation for the past 30 years, and as last year inflation rose to a level of 7 per cent., I ask the Government whether they are going to instruct the Inland Revenue to remove this inhibiting restriction on the private sector which, if I remember rightly, dates back to the Cripps Budget immediately after the war?

Mr. Crossman: The question is whether the restriction on people paying out more than 2½ per cent. will be removed. There is no restriction. There is only a statement that tax concessions will be paid below that level. A man is free to pay it out. The hon. Gentleman is arguing that he will not pay it out unless the State gives it to him to Pay.

Lord Balniel: The right hon. Gentleman has not answered the question which I have put to him. I would like to ask whether he will remove this tax restriction.
The White Paper pays considerable lipservice to the principle of partnership. I thought that the Secretary of State towards the end of his speech genuflected rather gracefully in the direction of occupational schemes. But the White Paper gives absolutely no indication as to the degree to which private and occupational schemes will be allowed to contract out of the State scheme. Contracting out meaning allowing private schemes to get on with their own business. Unless the House is provided with this crucial information, it is absurd to approve the White Paper.
For instance, Table 7 on page 63 of the White Paper shows a surplus of income over outgo in the National Superannuation Fund of £398 million in the first year, £283 million in the fifth year, and £176 million in the 10th year. These figures are virtually meaningless, because they take no account of contracting out by occupational schemes. If the Government really are going to allow occupational schemes to flourish, the figure of £398 million could be cut very dramatically indeed.
In fact, the House is given no idea in the White Paper of what scale of surplus the Government are aiming at or, indeed, whether there will be any surplus at all if generous contracting out arrangements are agreed on. No hon. Member in his private business capacity would make up his mind on the basis of such inadequate information. We are the trustees of the taxpayers' money, something which is too often forgotten nowadays. We would be failing in our duty if we approved a scheme where the financial arrangements are not properly spelled out.
The importance of occupational pension schemes is of such significance to the future, to the people, and to our belief in encouraging individual responsibility, that I hope that the House will forgive me if I elaborate on them a little. The development of private and occupational pension schemes whereby people are encouraged to take a larger share of responsibility on their own shoulders for their own future lies at the very heart of the Conservative philosophy. We believe that the interests of the country are better served if the emphasis of pensions policy

is shifted towards developing such pension schemes.
The savings of the 12 million people in these schemes form two-fifths of the total personal savings in the country. They bring in an extra £800 million of savings every year. These savings are invested in industry and go to create the wealth from which we pay for the wellbeing of our elderly people. They are invested and they go to create the wealth by which we pay for the hospitals, the schools, the roads and, indeed, the whole social services.
Contributions to private schemes are real, genuine savings for old age. They are quite different from contributions to the State scheme, which are really taxation on current production and are paid out during the current year to pay for existing pensions.
Every economic and social argument should lead the right hon. Gentleman to be really generous in the arrangements he negotiates for contracting out. Equally, every economic and social argument should lead the pensions funds to represent the interests of their 12 million members strongly and to demand reasonable terms; because I do not think that they will get reasonable terms unless they stand up and demand them. They will have to stiffen their backs, because the Secretary of State has a long tradition of hostility towards private enterprise. Smooth words in his speeches will not make any difference when it comes to the negotiations.
Of course it is tempting to the private enterprise schemes to drink the Government's syrup, especially when the right hon. Gentleman is putting on an air of great sweet reasonableness. However, I would advise them to taste it very cautiously indeed before they agree with the right hon. Gentleman.
From the public point of view, if there is any cutback in the savings of the occupational schemes it must be met by an increase in taxation.
Conservative policy is to encourage all the main channels of savings—building societies, unit trusts, life assurance, contractual savings. There is no channel of savings more open for rapid expansion than the occupational pension schemes. If the Government were to go


flat out to encourage occupational pension schemes to grow and to improve, Britain could generate a force of savings which, more than any other single economic measure, would counteract inflation.
Yet the future of occupational schemes is left entirely unresolved in the White Paper. People cannot be expected to pay a heavy increase in contributions to a new State scheme and at the same time pay into an occupational scheme. We want to know how big a reduction will be allowed for employed people and their employers. This key question is precisely the question that is evaded in the White Paper.

Mr. Crossman: The hon. Gentleman has said three times that we have evaded answering a question. Is he saying that if we had completed our negotiations with the occupational pensions schemes in secret and told the House, "Here is the agreement, fixed and sealed", he would have said, "What a splendid thing to do"? If he does not say that we should have done that, does he really think that I could now tell him how the negotiations are to take place? We have started the negotiations. I should have thought it reasonable to expect that while they are on he would be patient and listen, and would not complain that we have not told him the result of the negotions on how much will be deducted from the contributions. That is what the negotiations are about.

Lord Balniel: Of course, I am not asking the right hon. Gentleman that. What I am asking him to do is not to ask the House, on a Whipped vote, to approve of a White Paper before we know the contractual arrangements. This is absolutely crucial. No business person in his senses would dream of approving a financial arrangement of this kind.
Another important point about the contributions to occupational schemes and the State scheme is that contributions to a State scheme give people no contractual right to a pension. One would see this in practice if one tried to use one's contribution to the State scheme to secure a mortgage on a house. It would be quite impossible.
The table of benefits is really no more than a pious hope that our children in

10, 20 or 30 years' time will implement the promises which the right hon. Gentleman is making. They are really a kind of post-retirement credit, no more likely to be honoured than post-war credits; no more likely to be fulfilled than the Beveridge promise to abolish want in old age. As the right hon. Gentleman has pointed out, 30 per cent. of our elderly persons are on supplementary benefit.

Mr. William Molloy: rose—

Lord Balniel: I have a great deal to say.
I believe that the public are rightly cynical about such promises. The table of benefits takes us way out on a trip into the future. It is a kind of political arithmetic that I distrust, and most newspapers also seem to distrust it. The Daily Mail described it as "Barren fruit trees". "Fools' gold" was the phrase used by the Daily Telegraph. "A bad bargain was the expression of the Daily Express."Better if private" was the leader in The Times. "The poor remain poor" was the leader in the Economist. It is true that some newspapers gave it a moderated welcome. The Guardian gave it two cheers, which seems a fairly accurate reflection of the strength of the voice of the Liberal Party today.

Mr. Pardoe: Since the hon. Gentleman is so fond of quoting Conservative newspapers, may I remind him that in 1963 the Daily Mail said of the Liberal plan:
It is probably the most ambitious programme of help for the old and needy yet planned by any party.
If the hon. Gentleman would like to remain in his seat, I will read out several more such comments.

Lord Balniel: Plans introduced by the Liberal Party are always ambitious, in the sure knowledge that they will never be implemented.
This is no reflection on the right hon. Gentleman—the problem is inherent in any pay-as-you-go scheme, but the only promise the Government are making is surely, in simple terms, "I promise that the pledge I make today of better benefits in 10, 20 or 30 years' time in return for higher contributions, which will be paid immediately after the election, will be


honoured by our children". Who knows? The Beveridge promise was not honoured; the Beveridge promised land is still not here. Why should we believe these promises? The public are bound to be sceptical of long-term promises by a Government which has broken so many short-term promises, including promises on pensions made only four years ago.

Mr. Crossman: We have a very difficult situation here. I remember when the 1959 scheme came out. Everything is fair in party warfare, but I do not think that any of us in the Opposition then said, when the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said that his bricks would be worth sixpence, that those were mere idle words. On the whole, there is no evidence that when British Governments put forward serious pension schemes they are merely pipe dreams, as the hon. Gentleman says. We shall undermine the chance of any Government doing anything about pensions if that is to be said of Government schemes. The hon. Gentleman says that he wants an earnings-related Government scheme. How can it be done without giving people a table of what is wanted?

Lord Balniel: I was saying that the public are rightly cynical, because they remember the promises made only four years ago. They remember that the minimum guaranteed income scheme was—[Interruption.] The right hon. Gentleman says that it is coming, but, of course, it is not. Perhaps I might quote the words of the Chairman of the Parliamentary Labour Party in his pamphlet, "Paying for Social Services":
This Supplementary Benefits Scheme was salvaged from the wreck of the Income Guarantee, one of the firmest of all pledges given by the Labour Manifesto 1964, which went on the rocks in the economic gales of July, 1965. The Income Guarantee, was conceived as the answer to all means tests.
Do hon. Members understand why there is scepticism, or would the right hon. Gentleman like me to quote from his own election address?

Mr. Crossman: Certainly.

Lord Balniel: The right hon. Gentleman stated:
One of the first jobs of the next Labour Government will be to introduce a new 'income guarantee' which will apply to everyone over 65 and to every widow. Under this

system, within a few years the overwhelming majority of our old people will be raised above the National Assistance level, and have their pension supplemented as of right without a means test.
Supplementary benefit is based on a means test.
We are told in the White Paper that the scheme is
… based upon broad principles formulated in 'National Superannuation', published by the Labour Party in 1957.
The principles must have been very broad, because that was a funded scheme. This one is not. Under that scheme the money was to be invested in equities. Under this one it is not. I cannot help remembering the story of the senator who ended one of his speeches by saying, "Well, those are my principles, and if you do not like them I have plenty more where they come from."
I have emphasised the growth of the occupational schemes partly because for most people they give a better bargain than the State scheme will ever do, partly because they implement our belief that men and women want to take their own responsibility for providing for their future, and partly because of their economic importance.
We must look at the Government's proposals in this context as well—the economic implications—the likely effect on industrial costs and prices and taxes. In short we have to examine their effect on our ability to pay our way in the world. Before we start producing bigger and better pension plans, we must be absolutely sure that they can be paid for. The increase in the contributions is for most people an increase in direct, progressive taxation. The contribution for a person on average earnings will be five shillings a week over and above existing rates. A person on less than £16 10s. a week will pay less; a person earning more than £16 10s. a week, which is well below the average earnings, will pay more. People on higher levels of income will be paying 19s. 2d. extra a week.
In paragraph 52 of the White Paper it is stated categorically that, after some years, the contribution rates to the Superannuation Fund will need to be somewhat increased. No estimates are given for the Social Insurance Fund, which is left in a state of astonishing vagueness. But these increases in contribution rates follow on the present Government having


increased contributions during their four years of office by 40 per cent.—for the employed man, from l1s. 8d. to 16s. 8d.
Surely, the probable reaction of most people, and it would be mine, is that if they have their take home pay sharply and compulsorily reduced, they will put pressure on their employers for higher wages and salaries—rises which would be unrelated to increases in productivity. Technically, higher taxation is deflationary, but this is not how human beings respond. People are not pawns on the Government's chessboard. They like to make their own moves. The sooner we realise this and welcome it in society the better.
Married women are to have their right to opt out of the scheme removed. I would prefer to keep their present freedom of choice because this is apparently what the majority of them wish to do Today only 1,100,000 of the 4,600,000 women in employment pay the full contribution. The others only pay the industrial injury contribution of 7d. a week. The Government intend that they should now compulsorily pay the full contribution.
For a married woman earning £8 a week, this will mean a contribution not of 7d. per week, but of 10s. 10d. a week. A married woman working in a profession, for instance, who has opted out of the State scheme and is earning, say, £22 a week, will pay 29s. 8d. a week—an increase of over £1. This will surely discourage women from going to work, but in purely economic terms, which I am talking about at the moment, it is going to result in increased pressure for higher wages and salaries, especially in the service industries, where large numbers of women are employed. Again, the contributions of the self-employed are to be increased—by an extra 6s. a week for men and an extra 10s. a week for women and by an extra £1 7s. a week for those self-employed married women paying the present scheme contributions.
The impact on industry will be equally significant. It will have to pay 6¾ per cent. of the total pay roll, and for industry there is no ceiling at all. This will be a substantial additional burden when set alongside S.E.T., of which the White Paper makes no mention. The total effect of all these increases in contributions from employers and employees is difficult to

judge, especially as we do not know the contracting-out arrangements. The Government expect in the White Paper that it will result in a rise in the general level of prices. We are told:
There may thus be a small adverse impact on the balance of payments when the new scheme begins.
The expected rise in labour costs is ½ per cent., which would not be much over £100 million. However, I simply do not believe that figure. The economic editor of the Sunday Times wrote on 2nd February:
It is hard to see how it could be much under £300 million or 1½ per cent. of employment costs. This could worsen our balance of trade by something over £100 million a year.
The Confederation of British Industry is conducting an inquiry, but its preliminary view, according to the Financial Times of 13th February, is that the Government plan will cost industry £400 million a year.
I have spoken only of the increased costs which are visible in the White Paper, but, of course, it was only recently that the Government proposed that industry should take over the responsibility of the first four weeks of sickness benefit. There are strong arguments for doing this in the context of reducing taxation, but in the context of today, of soaring taxation and proposed additional burdens on industry, one has to reckon how these additional costs will bear on industry. The gross cost of the Government's proposal relating to sickness benefit was £400 million and the net cost is likely to be at least £100 million. Does that still remain the Government's proposal so far as the Social Insurance Fund is concerned?
It is surely a mistake to muddle a pay-as-you-go scheme with funding for the future. Quite apart from any other reason, it is desirable that there should be a clear public understanding as to what is being raised to meet existing benefits and what is being set aside as compulsory self-help for the future. The Government have stirred these two things together so that it is almost impossible for a layman to disentangle which part of the contributions is being used for today's pensions and what is being set aside for the future. It would be fairer to disentangle these two things absolutely.
Paragraph 167 of the White Paper shows how this confusion is being caused. It says:
In principle "—
but not in practice—
the new scheme, like the present one, will be financed on a 'pay-as-you-go' basis—that is, with current income designed to meet current expenditure. Most people must expect, however, to pay more for their higher benefit prospects.
I emphasise the word "prospects" and not "rights".
The paragraph goes on:
Furthermore, frequent changes in the percentage contribution rates ought to be avoided, especially in the early years when the scheme is settling down. The initial"—
I emphasise "initial"—
national superannuation contribution rates proposed … leave room, therefore, for the growth of expenditure for some years ahead.
The right hon. Gentleman is therefore, raking in more money than he needs in the immediate future. It is not only to avoid frequent changes in contribution.
There is another reason, and a more subtle reason, which we find in paragraph 178. This says:
The resulting surplus in the scheme's early years will have a restraining effect on the pressure of demand, and thereby enable any given level of public expenditure to be financed with a somewhat smaller recourse to general taxation.
So the insurance contributions which people believe are going to be used to finance their future pensions will be used to restrain public demand. But the restraining of public demand is more suitably undertaken not by the insurance contribution but by the Chancellor of the Exchequer in his budgetary provisions. By raking in more than is needed, the contributions are being used as taxation to finance other public expenditure which otherwise would be met out of general taxation.

Mr. Crossman: It is not quite as the hon. Gentleman thinks. If we withdrew from circulation a certain amount of consumption power, into a savings scheme or a pension scheme, we would thereby reduce the pressure. This is exactly the same effect whether it is done by us, through our powers, or by a private scheme and its methods.

Lord Balniel: It depends exactly upon what one does with the money. If it is

to be used to finance public expenditure, and results in a somewhat smaller recourse to general taxation, then it is being used to finance public expenditure.

Mr. Crossman: I have given a perfectly specific assurance on that earlier, namely that any surplus in the national superannuation fund will only be used for pension purposes. I made that clear in an earlier part of the statement.

Lord Balniel: I accept that what the right hon. Gentleman says is a firm assurance. I must remind the House that in the early years of the present scheme, when there was a surplus, as the result of excessive unemployment contributions, in the monies available in the fund, £225 million was taken away and used for the national superannuation fund. I hope that this assurance——

Mr. Crossman: Perhaps we can have the quotation, from paragraph 52, which says:
Separate funds will reflect the different nature of the benefits concerned … contributions paid into one fund will not be diverted for use by the other. Contributors can therefore know what proportion of their contributions is for national superannuation and what proportion for other purposes, and can be sure that the money paid for one purpose will not be used for another.
I said that we would invest the surplus. That is an absolutely clear statement.

Lord Balniel: It is an absolutely clear statement that money will not be transferred from one fund to another. What it could well be used for is to finance general public expenditure. We will study this, and I know that the right hon. Gentleman is trying to make an absolutely clear statement to the House.
There is another way in which the right hon. Gentleman is doing what I regard as the Chancellor's job. Contributions are being used to redistribute incomes. The harder one works, the more one earns and the less is the value of one's contribution. How this can continue to be called an insurance scheme I cannot think. Of course, it is necessary to have an element of redistribution to help the less fortunate in our community, but this should be the task of the State, through the tax element in the insurance scheme, and not through the personal contributions. The development of a State fund in a pay-as-you-go system has its dangers. Table 7 on page 63 shows that there will


be a fund of £1,756 million by 1977 and £3,439 million by 1987, subject to the contracting-out arrangements. In theory, this is compulsory saving for future benefits.
In some ways it is the answer to any Chancellor's dream. Honestly, I do not want to be the answer to any Chancellor's dream, even to a Chancellor from my side of the House. The pressure on Governments to raid these funds will be almost overwhelming. There will be pressure to meet worthy causes and perhaps to help them through an election by the distribution of benefits. One has to be very naïve in politics to believe that so long as the fund is under the control of the Government it will survive for very long.
We particularly and very warmly welcome the improved arrangements for widows in the White Paper. We are however struck by omissions. Groups of people whom I would have regarded as being in the highest category of need are not mentioned at all. When dealing with this question of people in need we are always faced with the understandable cry, "Why did you not do it between 1951 and 1964?" This cry is used to halt all social progress. Reform is an evolutionary process, and there were many stepping stones of advance in that period, advances which benefited the existing generation, and which were not only promises referring to the distant future.
One of the major omissions is a group of people for whom the public are not only prepared to pay but are also deeply anxious to help. We find it wrong that the Government have set their face against helping the over-80's—the non-pensioners. I have heard ad nauseam the arguments against helping them, and I remain completely unconvinced. We have also heard how the arguments have changed. First of all we were awaiting the minimum income guarantee scheme; then we were awaiting the earnings related scheme, which was to be published in the White Paper. Now that the White Paper is published we find that these people are excluded from the scheme.
They are a diminishing number of people in need of help. They are a group of people who have been proved, who are known and who are seen, to be in need of help, and they should be helped. The cost of doing so is dwindling every

day. It is tiny—£17,500,000 compared with the tremendous surplus on income over expenditure for which the Government are budgeting in the first year of the scheme. Like everyone else they pay taxes, and £3,500 million worth of taxation has been put in the national insurance scheme.
The way to help them is to provide for a non-contributory pension, as of right. There will be very few of them still alive when this scheme comes into operation. I will not weary the House with the intricacies of the argument. I will just say quite simply that the House ought to set this matter aright as a belated act of social justice. I hope that this can be incorporated in the Bill when it is produced.
The other group for whom I would like to see a much greater emphasis of priority are the disabled. Here again, I welcome the constant attendance allowance for the severely disabled. Surely, if one stands back and looks at society, and at the groups in need of support, the disabled—some of whom of have been crippled from birth; others who have been struck down by illness or disease; who cannot earn their own living—stand out beyond all others as being in need of support. People who have been injured in an industrial accident or those disabled in war receive some kind of pension, but there is nothing in the insurance scheme for the civilian disabled.
This is the big gap of the 1948 scheme. I find it deeply disappointing that the Government continue to differentiate between those who are disabled at work and those who are disabled by disease or accident. All the existing anomalies will continue. No attempt is being made to end them. Surely it would be the wiser, simpler and more humane to treat all forms of disability alike for benefit purposes?
We welcome the new attendance allowance for the very severely disabled, although there are no details of its levels and we do not know who will qualify. The allowance is valuable but it totally excludes the disabled housewife until she becomes a helpless invalid needing nursing attention. The social survey of the chronic sick will be available this spring, and I would like to ask that this part of the White Paper be taken back, reexamined and reconstructed, so that the


criterion of benefit is the degree of disability, not the historic causes of disability. There is no reason, if this part of the White Paper is taken back, reexamined and reconstructed along these lines, why it should not be introduced before 1972.

Mr. Crossman: The answer to that is that this is not part of the White Paper. Short-term sicknes benefits and unemployment benefits and the question of disability will be dealt with in length in a later statement in the spring. The subject is not excluded from this White Paper; there is a paragraph about it, but there will be a full statement.

Lord Balniel: Which spring?

Mr. Crossman: This spring.

Lord Balniel: And it will, perhaps, be possible for the right hon. Gentleman to introduce, in the proposed legislation, proposals for the civilian disabled?

Mr. Crossman: The statement dealing with sickness and unemployment, which will include any further details of disability, is expected in the spring, say, April or May. It will include full proposals for legislation to bring the short-term sickness and unemployments into line with the new scheme. We already have a scheme working which will be incorporated in the Bill.

Lord Balniel: If I understood the right hon. Gentleman aright, it applies to the short-term sickness benefit—it cannot apply to a long-term civilian disabled pension, for which I was asking.

Mr. Crossman: It will apply to long-term sickness and long-term unemployment, as is stated briefly here. It is in that context that we are prepared to consider the problems of disability.

Lord Balniel: Yes, but the right hon. Gentleman is well aware that long-term sickness benefit applies only to people in the insurance scheme, and the civilian disabled housewife who has never been in work is not in the insurance scheme.
My greatest dread when speaking about the elderly, the sick or the disabled is that inadvertently I might fall into the error of hon. Gentlemen opposite and make expensive promises which we might not be able to fulfil. This would be

quite inexcusable for any Opposition. We do not know the economic conditions which will prevail when we return to office. We do know that as a country we now owe £1 for every man, woman and child on the face of the globe. We do know that the economy has been grievously weakened. It would be wrong for me to promise this or that benefit to this or that group of the community, however deserving their cause.
What I can say is that amongst the disabled there is a social need which is crying out aloud to be set right. I accept that there should be a higher emphasis of priority on the disabled, even within the context of the social services. If one looks at social care in its full comprehensive context—which was the very point of our advocating the integration of the Ministry of Health and the Ministry of Social Security—one sees that there would be savings as well as increased expenditure in providing for the civilian disabled.
A disabled mother could live at home with her children, whereas otherwise she would be in a hospital bed costing £1,000 a year. Children could be kept at home when otherwise they might have to be placed in residential homes at a cost of £650 a year. Tangible savings of this kind can be made, but intangible savings in terms of human unhappiness can also be achieved.
The Government make no proposals for existing pensioners, except for the two-yearly statutory review. There is no easing of the earnings rule. There is no emphasis on help for the most elderly. The two-yearly statutory review will compensate for the rise in price levels. I concede that it might well be a valuable psychological comfort, but of course the adjustment of benefit levels will be substantially less than has been achieved in practice by all Governments except in the immediate post-war years.
During the last four years of Conservative Government the real purchasing power of the pension was increased by 19 per cent. This was, incidentally, simultaneous with a reduction in taxation. Now, the value of the pension is falling fast, and by this October two years will have passed since the last increase. The rise in prices in 1968 has been the worst for 17 years. The value of a single pension, £4 10s., has dropped


by 6s. 2d. since October, 1967. The value of a couple's pension has dropped by 10s.
The Government intend to tie successor Governments to a two-yearly uplift in pensions. May I ask for information? Is it the intention of the Government themselves to implement this principle and restore the purchasing power of the pension this autumn?
I would like to have made many other points, but many hon. Members want to take part in the debate.
I conclude by saying that I am opposed to creating a State monopoly in pensions. Yet there is such total imprecision in the White Paper, in that we do not know the arrangements for the private enterprise sector, the occupational schemes, that this is certainly possible within the context of the White Paper. It is, apparently, the Government's intention to build up surpluses. This may be attractive to the Socialist Party, because it gives a wonderful scope for spending other people's money. It is all very well for hon. Gentlemen to laugh. May I read what Professor Titmuss says in this week's issue of New Society:
What politician of the Left worth his salt will be able to ignore the balance of the National Superannuation Fund which will (assuming no contracting out) rise within five years to £1,756 million?
If, on the other hand, there is a genuine reality in the Government's desire to encourage the growth of occupation schemes, then that surplus will be short lived. The Government Actuary, at page 63 of the White Paper, says this:
… for those at present contracted out (i.e. some 4½ million men and ¾ million women), each ¼ per cent. a side reduction in the contributions would reduce the period of growth of the fund by about 1½ years, and the maximum size of the fund would be correspondingly reduced.
The article in the March edition of Planned Savings, which is a commentary on unit trusts, life assurance and savings, has put that phrase into ordinary everyday English, and it reads like this:
The Government Actuary has made some estimates of the effect of contracting out. If this is done on the same scale as at present, the scheme will run at a loss from its second year. It seems unlikely that the Government will be prepared to allow this. Most comment has ignored the fact that the scheme will not finance itself on the proposed contribution rates, but they will have to be raised after

about 20 years and yet again before the end of the century. If contracting out is popular the contribution rate will have to be raised within two or three years of the scheme's inception.
The right hon. Gentleman the Secretary of State should take back his White Paper and make up his mind what he is aiming at; whether he is aiming to establish a large surplus through taxation for a bigger State scheme, or whether he is aiming to encourage self-help through savings. He should tell us the terms of contracting out. He should disentangle the deliberate confusion which he is creating between what is being paid for existing pensions and what is being paid for future benefits. Only when such elementary information is available can we judge whether a structure is being created to meet the social needs of the future.
Until then, the scheme is no more realistic than earlier attempts by the Labour Party to produce a new pensions plan. It is an unhappy compromise between promises and pious hopes. It places little emphasis on personal responsibility and, in its present form, I cannot advise my hon. Friends to approve it.

5.59 p.m.

Miss Margaret Herbison: May I, first, congratulate my right hon. Friend the Secretary of State on his brilliant speech and for the lucid way in which he explained to the House exactly what was contained in the White Paper. I have seen on the Order Paper today the Government Motion, the Amendment headed by the Leader of the Opposition and the Amendment put down by the Liberals, and I have come to the conclusion that the Conservatives were, as usual, showing that they were doctrinaire in the matter of pension provision, but not nearly so doctrinaire as the Liberals.
I have listened carefully to the speech of the hon. Member for Hertford (Lord Balniel), but I have no idea what the Conservatives would put in place of the Government's proposals. This debate ought to have given the Conservatives a wonderful chance to outline alternative proposals if they did not believe in what they found in the White Paper. We have not had anything of that today.
The noble Lord said that their aim would be that the State would provide basic security. When he was pressed,


he said that this security would be linked with the previous standard of living. Before the debate ends, I hope that we shall be told what the Conservatives mean by "basic security". If it is linked to the standard of living previously enjoyed, how is it to be financed? We have a right to have those questions answered.
I want to take up one or two other points in the noble Lord's speech, and then I will leave the remainder to be dealt with by others of my right hon. and hon. Friends, because I hope to make a number of comments on my own behalf.
First, I take up the question of the minimum income guarantee. I do not know where the noble Lord and his hon. Friends have been living during the past few years. He says that we have done nothing for the over-80s. Never have I heard such nonsense. It is true that nothing was done for the vast majority of these non-pensioners, as they are called, until 1964. I will also concede that we did not bring in the exact scheme that we outlined in our 1964 Election manifesto which we called a guaranteed minimum income. However, we brought in a scheme which was very different from anything that had obtained before. The result is that there are over 600,000 more old people in receipt of a supplementary pension today.
Having visited a number of these old people, I believe that they now accept a supplementary pension as a matter of right and, in the majority of cases, do not consider that any stigma attaches to it. I know a number of non-pensioners who are over 80 and who are very thankful that the new scheme was brought in. It is nonsense for the noble Lord to say that we have done nothing for these people. They have now a guaranteed minimum income.
Next, I wish to deal with the provisions for women, and to take up a point which was stressed by the noble Lord. I must say that I found his speech a very great disappointment.
I approach this subject not as a feud between private occupational interests and State pension interests. I approach it to find out how we can best meet the needs of our people in retirement, in sickness, in disability and in unemployment.

If it is approached in that way without any doctrinaire ideas, one can come to only one conclusion. It is that there must be a partnership of the private occupational pension schemes and the State scheme. My right hon. Friend has made it clear that that is what the Government wish to have, and I know, too, that many of the millions of people who have occupational schemes—some of them not very adequate—feel that they want at least not to lose the benefits of the occupational scheme that they have.
In our search for adequate provision, particularly for our retirement pensioners, we have to use every means, State and private, to get the best all round. I accept that the occupational interests have played a very important part in various ways in the country. They have encouraged saving, albeit saving as forced as those in the State scheme will be. In many ways, they have helped our economy. The Government would be foolish to try and cut out completely those private occupational interests. If the noble Lord were not so prejudiced in wanting to leave everything to the private occupational interests, he would realise that what we are attempting is the only sensible course.
My right hon. Friend has heard a lot from the noble Lord about what he should do in carrying out his negotiations with the private occupational interests. I am sure that these will be amicable discussions. But there are those of us on this side of the House who warn my right hon. Friend that he has to safeguard the interests of the pensioners in the State scheme who will not have any part of their pension provision contracted out. If he can get something which will be equitable both to those who will be in the State scheme only and to those who will be partly contracted out, the vast majority of our people will be very satisfied.
The noble Lord seemed to suggest that we did not need to worry about ensuring that private occupational pensions, after award, increase from time to time to meet even the rise in the cost of living. However, he cannot pretend that the vast majority of occupational schemes do that at the present time. It just does not happen. The weak excuse that he gave linking it with taxation is quite unacceptable. If one were to accept it,


it would mean, in effect, that he was asking all other taxpayers who are not in occupational schemes to meet the cost of guarding against inflation. With the best will in the world, I do not think that the private occupational schemes can give the inflation-proofing that the State scheme can. That is one of the reasons why I feel that there is much to be said for the State scheme.
What about widows? Some of the saddest cases in my constituency are widows of men who had a fairly good occupational pension. They were all right while their husbands were living. However, even then, because of the lack of adequate increases after award, many couples found themselves in financial difficulties. Then, when the husbands died, in the majority of cases their occupational pensions died with them.
I have been to the homes of some of these old ladies. In most cases, everything in them is as shabby as can be. Having been used to a fairly comfortable standard of living for most of their lives, in the last years of their lives, because these widows were dependent on what the noble Lord would like most of our people to be dependent on—occupational pensions—they found that they had little or no income on which to live. The benefits that can come to widows from a State scheme could not be matched by occupational schemes.
It is already clear that I warmly welcome the White Paper. Its provisions will ensure something that I feel all of us want to ensure: that when the scheme reaches maturity the vast majority of our people who have a life-time of work behind them will have a pension on which they can live adequately without any recourse to a means-tested benefit. That is the acid test of any scheme. The scheme is redistributive. The noble Lord did not seem to like the redistribution within the scheme. Frankly, I back it to the hilt.
My right hon. Friend says that the figures of 60 per cent. and 25 per cent. are not sacrosanct. I accept that, but I would be very opposed to a lowering of the 60 per cent. I have been asked by one of my hon. Friends from a Scottish constituency, who knew that he would have no chance of speaking in the debate, to say to my right hon. Friend that he felt that the 60 per cent. should be increased,

because we would still have lower wage-earners getting less than the present pension plus the supplementary pension that covers rent, and so on. I leave that thought with my right hon. Friend. I thought that the 60 per cent. and the 25 per cent. figures were about right.
I am pleased that there will be a constant attendance allowance. I do not want to say too much about this, because I think that it is wrong to raise hopes too high. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) will know, from his experience in dealing with industrial injuries and war pensioners, that it is only the very severely disabled, those who need constant attention, who get this constant attendance allowance. It is important that people should realise that so that there will not be many thousands disappointed. I congratulate my right hon. Friend, because it seems that this is the beginning of fairer treatment for such people.
A small matter, but one of human significance, is the decision to pay the death grant for people either mentally or physically disabled—those who have never been able to work and have no insurance rights of their own. The decision has now been taken that the death grant will be paid on the insurance of the person responsible for the disabled person. As I say, that is a small matter, but it is one of human significance.
I want now to say something about women. I was highly amused by the noble Lord when he was dealing with women—perhaps I should say when he was dealing with the provisions for women. He said that he welcomed wholeheartedly the arrangements for widows. Does he not realise that if we were to have the kind of scheme that he has been trying to plug in articles in the Press, but has not made very clear today, the widows could not have these very provisions, outlined in the White Paper, that he welcomes wholeheartedly? When the noble Lord was reading all those cuttings from the Press, I began to wish that he had given as much study to the provisions in the White Paper as he had given to every bit of Press coverage on the pension scheme. Had he done so, perhaps he would have realised that he cannot welcome something if


what he intended to do makes it impossible to honour what he has been welcoming.
I welcome the provisions for women. I consider that they are infinitely better than those which obtain today. I again stress that no private occupational scheme could ever match the provisions for the widows. At long last, the decision has been taken to give widows, who either have no pension or a 30s. pension, a pension on a flat rate sliding scale.
I should like to make a proposition to my right hon. Friend on this matter. The decision has now been taken. But must these widows who have waited year after year wait until 1972 or 1973 to get this little piece of justice? I understand that the cost will not be very great. I think that it would be a good thing to contain it in the up-rating Bill so that the widows can have a pension from October this year. I hope that my right hon. Friend will give consideration to that proposition.
The noble Lord was also against taking away the option for married women. I am completely in favour of married women paying the full stamp. But there is a quid pro quo. At present, if a married woman pays the full stamp, and becomes sick or unemployed, she gets a reduced benefit. She does not get the £4 10s. that the spinster gets. But under the proposals of this scheme, she will get the full benefit. That seems to be a good thing.
It is important to remember that many women now work. The pattern is that they work until they get married, or perhaps for a few years afterwards, are at home while there are young children, but then go out to work again. Homes often have two incomes going into them. If we want to link the standard of living of a couple after retirement with their standard of living before retirement, one way of achieving it is by taking away this option and having the married woman pay the full stamp, so that she will also have a pension in her own right.
I have spoken about many of the matters which please me in the White Paper. Finally, I wish to deal with one part about which I have grave reservations. What is to happen to the present pensioners and to those who become pensioners

under the new scheme? We are told that there is to be a review of pensions every two years and that there will be a biennial increase. I welcome this as far as it goes, and I shall have something more to say about it. There is a specific promise that the increase will compensate for any rise in price levels since the previous increase. This is the only specific pledge about increases, that they will cover rises in prices.
We are also told that the amount of the increase beyond that will be decided by the Government of the day in the light of the general situation. This causes me great concern. We are told that before each increase the Government will take acount of movements in earnings levels, changes in the standard of living of the community as a whole, and the general economic situation. From previous experience my right hon. Friend will not be surprised to learn that this is where I part company with the Government's proposals.
In 1965, when I was the Minister in charge, a survey was carried out of the financial and other circumstances of retirement pensioners. The survey provided us with valuable information about the living standards of pensioners. Indeed, it corroborated what many of us believed to be the case. It showed that the majority of pensioners had incomes of about, or just slightly above, the supplementary benefits level. Indeed, we are told in the White Paper itself that the average income of pensioners is about two-thirds of that of the rest of the population and that the
general standard of living of pensioners is therefore substantially below that of the working population.
To the 7 million retirement pensioners we have to add the chronic sick, who are in a similar financial position. I believe that today the gap between the standard of living of our old people and the chronic sick, and that of the working population, is already too great.
We are told in paragraph 34 of the White Paper:
Those at work are in a position to use their bargaining strength to increase their amount of their share of the nation's income. Pensioners do not have the power to protect their interests in this way.
Of course, they do not have the power that the workers have—no one would


disagree with that statement—and as that is the case their interests must be protected for them. The only people who can do that are those who represent them in this House.
If we do not get a specific pledge that pensions will be raised in line with average earnings—and that was the pledge that we gave in our 1964 Election manifesto—the gap between the living standards of pensioners and those of the working population could be widened still further. In asking for this pledge, I am asking, not for the moon, but merely for justice for our old people.
When the Tories were in power we criticised them for their treatment of old people, and rightly so. We did this particularly on two occasions when the time lag between increases was far too great. On one occasion it was two years and nine months, and on the other it was three years and one month. I always like to give credit where credit is due, and I must, therefore, remind the House that of the five increases which the Tories granted during their 13 years of office, only one was less than that which was needed to keep the increase in line with average earnings.
I have always believed that all of us, and particularly those who are Socialists, have a moral obligation to care adequately for the old and for the chronic sick. We shall not fulfil that obligation if we allow the gap between the standard of living of the most deprived and that of the rest of our population to widen.
I wanted to make many more points, but other hon. Members wish to take part in the debate. There are other places where I might be able to press these matters. All I say to my right hon. Friend is that if a Tory Government, which we rightly criticised very often, could give increases, sometimes beyond what was needed, to meet the rise in average earnings, then this Government, pledged as they are to care for old people, as we have always been, cannot do less than pledge to tie increases to the rise in average earnings, and that is the minimum. We are not even getting that as a minimum at the moment.
I wish my right hon. Friend the greatest success in the consultations that he is to have with the C.B.I., the T.U.C., and the private occupational pension interests. I

think that the aim of most of those people will be to ensure that we finally produce a scheme which will end the two nations among our old people, which will end the need for means-tested benefits, and which will give to those who work all their lives the dignity of knowing that in retirement they have an adequate pension on which to live.

6.27 p.m.

Mr. John Boyd-Carpenter: I am glad to have the opportunity of following the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) because, as I think she knows, I have always very much admired the humanity and sensitivity with which she carried out her duties as Minister of Pensions and National Insurance.
I am glad, indeed, that the right hon. Lady stressed the work which she did in seeking further to break down the resistance of people who were entitled to supplementary benefit to apply for it. I think that the humanising of the administration of that, the last and perhaps most vital of social services, was a proper approach, for which the House is indebted to her.
Despite the excellence of the speeches today—and, if I may say so, I think that my noble Friend the Member for Hertford (Lord Balniel) made a remarkable contribution—the debate and, indeed, the White Paper has an atmosphere of un-reality. No doubt if this Parliament goes on there may be a Bill next Session, but everybody knows that when the time laid down in the White Paper for the operation of the Measure comes about, April 1972, it will not be the right hon. Gentleman who will be responsible for operating this, if it is to be operated. The House knows, as the country knows, that it will be my right hon. Friends who will have the responsibility for dealing with these matters.

Mr. Pardoe: It might be us.

Mr. Boyd-Carpenter: The hon. Gentleman, who is occupying the position which traditionally has become known as windy corner, must not introduce a note of calculated frivolity into a serious debate.
There is an unreality about the right hon. Gentleman's undertakings. If this had been intended seriously, there have been four and a half years in which it could have been introduced. We had the


broodings of the right hon. Member for Sowerby (Mr. Houghton) and before that the broodings of the right hon. Member for Leyton (Mr. Gordon Walker); and we have had the Secretary of State. Had this been really intended, it would have been possible to carry it into operation. As it is, the whole thing is clouded with unreality and uncertainty. The one certain thing is that whatever else comes into operation it will not be this.
The right hon. Gentleman, in a deliberate reference to his own efforts in pensioneering many years ago, has entitled this White Paper "National Superannuation". That recalls the days when, as all who took part in the debates at the time will recall, the right hon. Gentleman put forward all kinds of other schemes which clearly, as he knew, would never come into effect. Days when a scheme appeared very attractive financially until it appeared, for instance, that credit was taken on the contribution side for contributions made in Northern Ireland with no counterbalancing entry in respect of outlay for benefits paid in that province. There was a similar unreality there, but despite the use of the title there is a very great change in the substance.
We heard a great deal at one time—indeed, it was the slogan of the 1959 election—of half pay on retirement. We do not hear that now. This is not half pay on retirement or anything like it for the great majority of people concerned. At the most, it is half pay on retirement for the man or woman who never gets much above half average earnings throughout life and is not, at the moment, over the age of 42 or 43—a comparatively limited section of the population. As my hon. Friend has pointed out, the whole scheme is at the moment little more than a skeleton.
As the right hon. Gentleman admitted, there is in it nothing about proposals for sick benefit and disablement; and, an even bigger omission, there is nothing at all about industrial injuries. We are not told whether, in the context of wage-related benefits, industrial injuries are to move from a loss of faculty to a loss of earnings basis, which is a matter of the very greatest importance.
We are not told what share of contributions levied under these proposals

is to go to industrial injuries benefit, which is lumped in with contributions to the National Health Service and redundancy payments. There are huge gaps. The biggest gap of all is as to the financial viability of the scheme. Unless we know two things—the anticipated number of people who will be contracted out and the degree of remission of pension contribution which will be granted to the contracted out, then all the figures in this document are wholly useless. We are given precise calculations of the surplus at the end of the first or second year. We are given calculations as to when it will be necessary to raise the contribution. But all these things are subject to this enormous gap.
Perhaps the right hon. Gentleman can tell us today—he refused to do so on Monday—whether he has even a working hypothesis as to the number of people likely to be contracted-out. He will recall that when the 1959 Act was before Parliament an assumed figure was given on which calculations were based. Will the right hon. Gentleman do the same? That would introduce at any rate a touch of reality into these calculations. But until we know what is the assumed level of contracting out, the whole financial basis of the scheme is not worth the paper it is written on; and the right hon. Gentleman knows it perfectly well.
I suggest that when the national economy is in the state in which it is at present it is an extremely serious thing to bring forward a proposal which contains very heavy long-term liabilities for the people without setting forth how it will be financed and what the financial basis will be. This is a very considerable defect in the White Paper. I was interested to note that in the financing of the scheme the right hon. Gentleman has adopted, as he admitted, the practice from the 1961 Act of applying to the payment of current flat-rate benefits revenue raised by way of contributions to a wage-related scheme. He will recall that one of his hon. Friends, with singular lack of tact, mentioned today that in his unregenerate days he referred to that method of financing as a swindle.
That was argued at the time and can be argued again, but if those who were responsible for that scheme at that time were responsible for a swindle it was a very small peccadillo compared with


the scale of swindling operations for which;he right hon. Gentleman is responsible. The operations of Savundra or Whittaker White appear as that of mere amateurs compared with the right hon. Gentleman if there ever were any validity in the charge which, with remarkable frequency, he used to make in those days.
There is, however, a dodge in this scheme which, were I one of the kind of persons who use a Wykehamist vocabulary, I might need to adopt the right hon. Gentleman's own expression in this context. It is the redistributative element to which my noble Friend referred. The 1961 Act was, of course, weighted in favour of the poorest. But that was done openly and fairly by the use of the Exchequer contribution. The right hon. Gentleman himself used the correct phrase. Each brick, each unit, of contribution brought and bought the same benefit no matter what point in the scale of earnings it related to. It had that element of an insurance scheme. But that is not so with this scheme.
The person on half average earnings gets 60 per cent. pension related to those earnings. Contributions above that bring in only 25 per cent., with the result that a man on average earnings, although he contributes the same proportion of his earnings as does his less successful brother, will get about 42 per cent.; and a man at the top of the scale will get about 36 per cent. How can the right hon. Gentleman describe that as a pension contribution?
The right hon. Gentleman laid great weight—and rightly—on the preservation of the concept of insurance, and paragraph 25 of the White Paper does it most eloquently. I join with him in paying tribute to those who drafted it. I think that I can recognise the hand. None the less, this is a real blow to the insurance concept if the same contributions bring less and less in pensions benefits merely because one man's earnings happen to be larger than another's. As my noble Friend said, this is not insurance. The right hon. Gentleman admitted that it was somewhat different from life insurance, and indeed, it is. This is redistributive taxation.
I refer the right hon. Gentleman, as criticism of doing this, to the very words of paragraph 25 of his own White Paper.

It is, of course, redistributive taxation on top of that administered by the Inland Revenue, which already administers the most progressive system of direct personal taxation in the world.
This is a serious defect in the scheme, and it has a direct bearing on the other issue which I wish to put to the House. That is, the possibility of a fair contracting-out system being adopted in the case of a pension scheme of this sort. Of course, as the right hon. Gentleman pointed out, this is the wrong phrase. "Contracting-out" is abandoned. There is no provision for it in this scheme. The most that is offered is the much smaller benefit of abatement. But how possible is a scheme, even of abatement, in connection with proposals of this sort?
In a so-called pension scheme, which is really taxation, and in which one category of persons subsidises another category and the other category is subsidised by that category, if one is to allow contracting-out or abatement, one must face overwhelming pressure for the subsidisers to contract out and the subsidised to contract in. If the right hon. Gentleman really proposes to allow that, let me tell him at once that the Treasury will not let him, because his scheme will be bust. The essence of it, the subsidising of those at the bottom of the scale, will be destroyed if the subsidisers contract out.
Therefore, I have the gravest doubts whether any scheme of contracting out or abatement which is worth having and which is likely to be acceptable to the occupational pension schemes is possible in respect of these proposals. I would not presume to give a warning to those distinguished people in the insurance world with whom the Secretary of State is negotiating, but I would advise them to use a long spoon, and to look very closely at this scheme. Although they may be offered something which can be presented as a scheme of abatement, I am very doubtful whether it will be the sort of scheme which any sensible pension fund manager would be prepared to adopt.
If it is merely knocking off ¼ or ½ per cent. of the contribution, leaving those running occupational schemes with the obligation of administering their part of the State scheme and their own scheme at the same time, with a double administrative burden; if they are to be left,


as the White Paper says they are to be, still with a liability to pay the employers' contribution in full in respect of figures above the employees' ceiling, the £33 a week level, I doubt whether more than a handful of those who operate these schemes would feel it worthwhile to continue.
As the right hon. Gentleman properly pointed out, the economic importance of these schemes, particularly in view of the shortage of savings today, is major. It is the essence of this scheme and part of its evil that it will be extremely difficult to find means of providing a proper abatement system for it so that those schemes shall live. The House must face the fact that if employers are to pay 6¾ per cent. of their total wage bill and employees 6¾ per cent. up to £33 a week, there will be no money left over to provide an occupational pension scheme.
The right hon. Gentleman referred to the large employer contributions—higher than our own, I agree—in certain European countries. But that is not the complete picture. Those high social security liabilities on employers in Western Europe are matched, on the whole, by much lower levels of company taxation, and it is the total of the two which alone constitutes a valid comparison. Therefore, the right hon. Gentleman need not delude himself on the basis of Continental experience into believing that it will be easy for employers to operate other schemes which will operate on top of a State scheme of this kind without abatement.
The right hon. Gentleman has also created a further difficulty in this respect by his proposal for inflation-proofing and revaluation of pensions. A funded private scheme cannot properly calculate its liabilities on an actuarial basis if it does not know what those liabilities will be. It is easy for the Secretary of State, with the power of the State and taxation behind him, to take these liabilities, but a funded private scheme will be in the greatest difficulties in competing.
For those three reasons, because these proposals go—I agree with the Liberal Amendment on this—far too high up the scale, because of the redistributative element and because of the inflation-proofing, I believe that, if this scheme

were ever to become law, we should be very near the end of the private schemes, and that would be an economic and social tragedy.
A number of other aspects should be probed, and I hope that they will be in this far too short debate. There is, for example, the very sinister reference in a later paragraph to the impact on public service pensions, and to the fact that this scheme may involve some "partial realignment" of public service schemes. What does that mean? Does it mean that the members of the Civil Service or Armed Forces, who, at the moment, receive non-contributory pensions as a condition of their employment, will see those pensions scaled down because they will have to contribute for other pensions? If not, what does it mean?
There is the extraordinary reference to the use of this scheme as a means of curtailing demand, and thereby easing the burden of taxation. Will the Government never learn? One does not curtail effective demand by piling on additional taxation. All one does is kill savings, because people refuse to save, or start dissaving, rather than cut their standard of life. If the right hon. Gentleman is trying to persuade himself and the House that, in an oblique way, he will get an economic benefit in return for the heavy financial liabilities of the scheme, he is deceiving himself—and on the same lines that the Chancellor of the Exchequer has been doing for the last two years.
This scheme is not a real scheme which will ever operate. It is blue-print for an election manifesto. It is to be the central jewel of the Labour Party's election manifesto when the time comes. The timing of the operation makes this clear. This Session—the White Paper and this debate and a blare of television interviews. Next Session—the Bill, with wide publicity and the public warm and cosy with the feeling that they will have a comfortable and pleasant old age.
But the sharp shock of the swingeing increase in contributions comes only after the electorate has voted. Before the election, there is the debauch; only after it, the hangover. This, of course, to those of us who are connoisseurs of the right hon. Gentleman's exercises in pensioneering, is a very fine and delicate example of his style.
But it is not the right way to deal with this problem, the greatest social problem of all and one of the greatest of our economic problems. It is 25 years since Lord Beveridge's famous Report was accepted by the then Government, and most people accept that the scheme which emerged from it has served the country well. Lord Beveridge was a great public servant. It is equally generally accepted that, with changing circumstances, that scheme is now outdated.
Is not the right way of dealing with this matter not to think in terms of controversial election-orientated proposals, but the appointment of a new Beveridge Committee to look at the matter in the circumstances of our community today and to produce objectively, for the House and the Government, proposals which can be considered on the basis of being the work of independent people who have investigated the matter objectively?
This would be the right way to handle a complete recasting of our social security system. Indeed, it would be the only way to do it. If Sir Winston Churchill, at the height of the greatest war in history, could organise that committee and accept its recommendations, cannot the present Government imitate his levels of high statesmanship just a little? I put these proposals to the Government. I regard this matter as an acid test of the sincerity of their concern for the old and for the strength and justice of our society.

6.52 p.m.

Mr. J. T. Price: I will try to refrain from following the highly polemical note struck by the noble Lord the Member for Hertford (Lord Balniel) and the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). We are discussing a matter of high national policy which has not been sprung on the House suddenly in the form of a Bill. It has been brought before us constitutionally and properly in a White Paper which is really a declaration of intent.
On another occasion I would be happy to debate the party political inferences with the right hon. Member for Kingston-upon-Thames who, in a previous incarnation, held the office of Minister of National Insurance and carried out that task with efficiency in many respects. He will recollect the great debates we had in 1959 and 19(50, in which he played a leading

part as Minister and in which I was privileged to take part, particularly in Committee upstairs. He is well aware of the arguments which characterised those debates. Tonight, we are discussing an entirely different state of affairs. We are considering a forward policy which will put on to a proper basis a reasonable reward for those for whom no other provision has been made.
At this stage, I should declare a special interest, though by no means a financial one. I have taken a lifetime interest in occupational pension schemes from a practical point of view, both as a promoter of them, as an administrator, and for many years as an active executive member of the National Association of Pension Funds. That Association conducted a full study into this question and its views, as set out in "The Relationship of the State in Occupational Pensions", which was published in September, 1968, have been circulated to all hon. Members.
When hon. Gentlemen opposite try to make polemical party capital out of this, I am entitled to remind them of the findings of qualified experts who have addressed their minds, without whimsicalities but in an attempt to ascertain the truth, to this matter. They do not share the critical opinions of hon. Gentlemen opposite. For example, on the question of a basic pension they say in their summary of conclusions supplied to the National Association of Pension Funds:
There should be an obligation on the working population and on their employers to make provision for their old age and for the risk of disability and death at least up to a basic minimum which should be fixed somewhere above the bare subsistence level This provision for basic needs can best be met through the State system. We do not advocate the extension of occupational schemes on a compulsory basis. The necessary improvements in the State system should be made when the economic situation permits. It must, however, be recognised that the best guarantee of adequate protection for the dependent sections of the community lies in a healthy growing economy.
That is a far more rational approach to this question than the meretricious attempts of hon. Gentlemen opposite to make party capital out of it. I would be equally critical of any of my hon. Friends who thought that they could make party capital out of it.
Having a strong personal interest in these matters, for the reasons I have stated


and because of my previous interest in trade union schemes—I helped to negotiate many of them and a great number of them have stood the test of time—I wish to do nothing which might damage the constructive work which has been done in the occupational pension sphere. I am prepared to accept the assurances of the Secretary of State that it is not his intention so to do.
The speeches of the noble Lord and the right hon. Member for Kingston-upon-Thames sought to create in the mind of the public the impression that, for a pernicious reason, my right hon. Friend and his advisers are embarking on a course of folly. That is not true. It is obvious that we are not dealing with a small matter. This is a major financial operation of State provision for the future.
I listened with interest and attention to my right hon. Friend's remarks. He spoke in his usual vigorous way, although I would not go along with the charge that he adopted a Wykehamist manner. That would be a difficult proposition for me to swallow, never having been to Winchester. I would not try to make party politics out of this, and I do not believe that politics comes into it in a big way. I doubt whether it could be regarded as an election winner for the Labour Party.
We are being charged with lack of foresight, wisdom, sincerity and honesty, but it is strange that during the 13 years of Tory rule nothing was done to break out of the stranglehold of the old scheme. Only in 1948 did the first breakthrough occur, following the Beveridge Report, although on that point the Secretary of State made a serious blunder.

Mr. Crossman: Oh?

Mr. Price: It occurred on a matter of fact. I have no intention of disputing his opinions, some of which I do not share.

Mr. John Nott (St. Ives): rose—

Mr. Price: I will not give way at this stage, mainly because I am dealing with my right hon. Friend. A famous politician who was engaged in an attack on Sir Winston Churchill once said in the House, when a back bencher tried to intervene, "I will not give way. Why should I bother with a little fish when I have a great big cod on my hook? "I say that without disrespect to the hon. Member for

St. Ives (Mr. Nott), to whom I shall give way in a moment. [An HON. MEMBER: "No codding."] When Beveridge published his famous Report in 1942 it was the starting point of a great many things, including a great push forward in occupational schemes. He advised the Government of the day to anticipate an unemployment rate of 8 per cent. My right hon. Friend spoke of 3 per cent., but it was 8 per cent. If Beveridge's anticipation had been correct, and there had been 8 per cent. unemployment, which providentially there was not, the National Insurance Fund would have "gone bust" long ago.
My right hon. Friend has given an indication of good will towards the occupational schemes. There are 65,000 of them. They cover between 12 million and 13 million people, they cater for more than half the adult workers and have assets valued at £8,000 or £9,000 million. [An HON. MEMBER: "A billion."] I must get my noughts right even though Government Departments are not particular about noughts. We have been reminded already that occupational schemes represent a surplus each year on their present basis of £800 million to £900 million of savings channelled into industrial investment which is essential to the future prosperity of the country. They are a major source of investment. Something like 40 per cent. of all investment going into industry stems from occupational pension funds. It is, therefore, a matter of great concern to me, with the experience I have had, to see that nothing should be done prejudicial to the economic interests of the country by translating taxed savings of this sort into some other form of taxation which is not savings at all. I do not regard contributions paid to a State scheme as savings. This is a matter of judgment, but I do not accept that they are. They cannot be savings unless there is a contractual liability to have the money there at a given time to pay a given amount of pension.
In a go-as-you-please, or go-as-you-pay, scheme one does not have savings but merely money from current revenue to cover current liabilities. The only safeguard for a State scheme is the power to levy additional taxation on the citizens if circumstances so require.
In a previous incarnation I was an official operating in a very efficient trade union at national level. The feeling in the trade union world as I understand it is that, having spent the last 20 or 30 years building up occupational schemes for the future benefit and security of the members of the trade unions, they are anxious about anything which might adversely affect them.

Mr. Nott: With his knowledge, how does the hon. Member think that this scheme will be viable economically if the occupational schemes are to be maintained and encouraged? That is the crucial point we are discussing.

Mr. Price: I would not dissent from that altogether. The fundamental consideration in all future legislation based on the declaration of intent in the White Paper is related directly to the number who contract out, with all the delicate balance of arguments on these matters. I hope that the Secretary of State will find it possible to adopt a very liberal attitude towards this question.
I do not make idle prophecies, because so often when we do so we are proved wrong and have our speeches thrown back in our faces years afterwards. During the last five or six years there has been a very widespread break in the front of many of the contributory schemes because, as National Insurance contributions have been going up to meet increasing liabilities, it has been found necessary to give additional benefits to old-age pensioners.
We have had to pay more revenue, but, at the same time, many private schemes have made adjustment downward to minimise the amount of contributions required in the private schemes to compensate for additional contributions required for the State scheme. This is not a myth, but a fact. I could give much more detailed information on this aspect if I were called upon to do so.
I hope that in further consideration of legislation to follow the Secretary of State will look more liberally on contracting out than his present deliberations appear to suggest. There will be an intensification of contracting out of private schemes, if no arrangement is made for a mitigation of contributions to the national scheme. Hundreds, probably thousands, of schemes have had an

arrangement in recent years between the employees and their employers to disregard for contribution purposes for superannuation £2 to £4 a week to mitigate the additional State contribution. There is much evidence of this which I hope my right hon. Friend will consider.
It is obviously too late for anyone to make a technical speech tonight about the relative advantages of non-funding against funding. This is a highly technical field in which people have views which may not square with mine. There is a serious danger that if we do not strike the balance right this time the Government will be charged with exposing people to over-insurance, particularly those in lower paid occupations.
In many thousands of employments where wages do not reach the national average there may be contracting out—this applies to the great Co-operative movement, with all its distributive outlets and not particularly high wages in many cases—and where the funds already provide 50 per cent. of wages on retirement based on average earnings in the last three years. We shall be getting a situation in which people will insure themselves for something in excess of average weekly earnings. That is not desirable. I hope that this will be considered when negotiations take place.
We do not appear in any kind of white sheet tonight as Government supporters. We are putting this forward for discussion and careful analysis by those who are interested in a scheme which is calculated to raise the standard of life of future generations to a higher level than anything previous generations have had secured for them. I am anxious this should be done on a basis of sound finance. I do not want to be a party to any bucket-shop finance or broken promises, because the economy will not sustain what I am committed to. This is very easy for politicians because their rate of mortality is high, both for electoral reasons and because of the ordinary exigencies of life. The mistakes of this generation could very well concertina on to future generations if we do not have it right.
I hope, having had this debate and split our differences, we might go away with this thought in mind: this is clearly a long-term project and the "green edges" which the Secretary of State has


spoken of will have to be somewhat diluted, or perhaps changed to some other colour. A good deal of further time will be needed particularly on the aspect of contracting out which is the nub of this question. This will take some years. It will be, according to the prophecies of the White Paper, 1972 before the Bill is put into operation.
What is to happen in the meantime? I emphasise to my right hon. Friend that many of the 6 to 7 million existing pensioners are having a very hard struggle. I hope that nothing in the White Paper will inhibit the Government from making the earliest review—this year—of the state of affairs as they affect the old-age pensioners who are looking to us for further assistance.
Having been privileged to take part in this debate, I hope that we may continue to discuss it, both in this House and in the country, without the narrow party considerations which so often disfigure our debates. Intelligent people outside the House understand all too clearly that the State already bears very heavy liabilities for raising the standard of life, the social services, the educational services and all the other things we are being pressed for today.
If we go forward tonight in the spirit that this is another step forward, carefully thought out, then we may carry with us all the people of good will in the land.

7.12 p.m.

Mr. R. H. Turton: The understatement in this debate has been the remark of the hon. Gentleman the Member for West-houghton (Mr. J. T. Price) that this White Paper is not an election winner. We should not look at this matter purely on a party basis. After all, we are examining the effects of the Beveridge scheme, which was adopted by all parties and for which all parties are responsible.
I have been disappointed in the White Paper, just as I have been disappointed with some of the effects of the Beveridge scheme. The Beveridge scheme was described as a "scheme of social insurance … designed of itself to guarantee the income needed for subsistence in all normal cases". It has never fulfilled that object.
I am disappointed, in looking at the White Paper, that the Government proposals do not attempt to deal with the

defects of the Beveridge scheme and our present scheme of insurance. Perhaps I might put this under three headings. First of all, there is the position that of the 7 million present pensioners a very high proportion of the older pensioners are so poor that they have to apply for supplementary benefit. The second disadvantage of our present position is that the elderly are deterred from continuing to work by an earnings rule and, as a result, the nation's economy and productivity is weakened. The third effect is that there are, as my noble Friend the Member for Hertford (Lord Balniel) said earlier, about 125,000 very old people who have no pension as a right and are living in very poor circumstances.
How far does the White Paper attack these problems? I share the anxiety of the right hon. Lady the Member for Lanarkshire, North (Miss Herbison)—this White Paper does nothing for the 7 million existing pensioners. The Secretary of State, in his disarming way, said that this White Paper is not his first priority. Surely our first priority should be somehow to right the position of the existing pensioners. It is not only the existing pensioners who will get no help at all from this; nor will the 600,000 who become pensioners in 1972 to 1973.
We have not, under this scheme, removed the necessity for pensioners having to supplement their pensions, before 1980 at the earliest. In other words, nothing is to be done to tackle the real problem of the very old living below subsistence standards for another 11 years, and probably it will take longer than that.
It is said by the right hon. Gentleman that he has provided for a biennial review. The exception which I think the right hon. Lady was alluding to was the year 1951, when there was a gap of three years and three months before the pension was reviewed. It was then only inadequately reviewed and pensioners were not even given an equivalent to the rise in prices. With the exception of the 1951 illustration—which is one of the many reasons why the Labour Government lost office in 1951—succeeding Governments had tried to recoup pensioners for the rise in prices and have tried to bring their standards up to something like the present earning level. The White Paper fails to give that kind of review and the "green edge" ought to be corrected.
It is a tragedy that the White Paper accepts the retirement condition and the earnings rule. This should be changed. It is a very great temptation to the able-bodied old people to add to their pensions by more than £6 10s. a week and so have an income of above £11 a week. This involves them in committing a crime. It is very harsh when they see that their neighbours are earning £20 a week and are subject to no penalty. It is this disparity between the earnings level of the man who has retired and who can work and the rest of the community which I hope will be corrected in any Bill which is introduced.
Finally, we come to the third effect of the White Paper. Not only does it do nothing for the 85-year-olds who have no pension, but it is creating a new class of those who will not qualify for pension and who will be in a similar position in the future, should this scheme come into operation.
I hope that the Minister will deal with two points which have not been raised so far. The first is the position of the self-employed who earns less than the average earnings and who will not be brought into the scheme. Just as before those earning over £420 were excluded from the pre-1948 scheme and, therefore, were never brought in when they were of pensionable age, so there will be a new class now, both of the self-employed with low earnings and of the non-employed.
It is wrong to talk about the non-employed as not being a class of person. The right hon. Gentleman has alluded to these people as those who are normally employed and who fall out of employment for a short time. The statistics show that there are a considerable number of men and women who are in a non-employed class and who will be excluded from qualification for pension under this scheme.
I ask the Minister to address himself to this and also to explain how we shall determine which of the self-employed will be contributing to the scheme and which will not be contributing. How will the £11 a week figure apply to a self-employed man, who probably does not know until after his Income Tax year has ended what his rate of earnings throughout the year were? It will be difficult for the scheme to be enforced then to bring him in or exclude him.
I believe those to be the three main weaknesses of the scheme. The answer is that which was suggested by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). Just as the Beveridge scheme was created by a committee that examined the whole question of the need for provision against old age, so now—we probably should have done this a long time ago—a new committee should be set up to re-think the problem that Beveridge examined, to look at the weaknesses of the Beveridge scheme, and put forward a scheme which could be accepted by all parties.
I have thought for some time that we must review the whole basis of the Beveridge scheme. Three great changes have occurred since Beveridge made his review. First, there has been the change from a period of high unemployment to one of full employment. This is not likely to alter in the next decade or so. Secondly, there is the growth of private occupational schemes. Thirdly, there is the most important fact of the ageing nature of the population.
To meet these changed conditions we should recognise that it is a State responsibility to make more generous provision for the very old than for those who are just reaching the threshold of old age. When, a month ago, I raised this matter in the debate on the Second Reading of the National Insurance Bill, the Secretary of State said this:
'… there is no real evidence that need in old age is precisely related to the particular period of old age."—[OFFICIAL REPORT, 7th February. 1969; Vol. 777. c. 833.]
The right hon. Gentleman has overlooked his own reports. For some time I have been following the incidence of age on application for supplementary benefit. Nineteen per cent. of men between 65 and 69 apply for supplementary benefit. The figure rises to 22 per cent. between 70 and 79 and to 26·7 per cent. for the over-80s.
For women, the position is even more sharply distinguished. In the first five years of pension age the proportion is only 11·8 per cent. It rises in the 65–69 age group to 17·6 per cent., in the 70–74 age group to 27 per cent., and in the 75–79 age group to 33 per cent., and above that age group the figure rises to 36·7 per cent.
The disgrace of our present social security system is that we accept the fact that the older the pensioner becomes the more he must have recourse to supplementary benefit. I congratulate the right hon. Lady the Member for Lanarkshire, North on what she has done to make it easier for more people to accept supplementary benefit. But we must recognise that this is the defect of the whole of our pension plan.
It should be a pension that is below subsistence in the early days of old age and which rises when the retired person is older and cannot do other work. When he reaches extreme old age and his needs are much greater, the pension should be well above subsistence level. I say that it should be below subsistence level in the early stages because there should be a provision in the insurance scheme for invalidity which is on the subsistence level. Those old people who can work should be encouraged to work at the threshold of old age. If they are not able to work, they should be able to draw the benefit for invalidity.
We must weigh our priorities. The first responsibility of the House of Commons should be to relieve existing pensioners and the 125,000 non-pensioners. However pleasant these great plans are to give everybody an occupational pension in the future, that must be our second priority. It is a responsibility which can be discharged far better by private occupational schemes than by a State pension scheme. The question of the age of retirement should be what private enterprise decides, and will no doubt vary from employment to employment. In some cases employers will be retiring their employees at 60, as the banks do. In other cases it will be at 65. The State has a responsibility for providing subsistence provision for old age.
For that reason, the Government have their priorities wrong. They should take back this White Paper with the green edges and think it out again. The right course is to accept the suggestion of my right hon. Friend and appoint a new committee to look again at the whole matter and report to the House.

7.30 p.m.

Mr. Kenneth Marks: I very much appreciate what the right hon. Member for Thirsk and

Malton (Mr. Turton) said about the very old. But I cannot agree with him about pensioners having a pension below subsistence level immediately on reaching retirement age. People of that age should have the choice of carrying on, and I agree very much with what he said about earnings.

Mr. Turton: May I correct one point. I did not say "retirement age". I said "At the threshold of old age."

Mr. Marks: I am still not with the right hon. Gentleman.
On these occasions, those of us who have been described as rank and file back-benchers sometimes fret about the priority given to members of the Privy Council. But today I looked forward to hearing such members on both sides who have had vast experience in this matter, such as my right hon. Friend the Secretary of State himself and my right hon. Friend the Member for Lanarkshire, North (Miss Herbison). I still look forward to hearing my right hon. Friend the Member for Sowerby (Mr. Houghton). My right hon. Friend the Member for Llanelly (Mr. James Griffiths) has listened to most of the debate but, with his usual courtesy to others, has decided not to speak so as to make time available for the rest of us. The speeches of the right hon. Members have all contained a great deal of wisdom, experience and humanity.
What do I want from any new scheme? I want to see a scheme which does not give those who retire too sharp a drop in their standard of living. The noble Lord the hon. Member for Hertford (Lord Balniel) also wanted that. I want to see a scheme that will ensure that every man and woman has a reasonable pension related to his or her lifetime earnings, but with some tipping of the balance in favour of lower-paid workers. A pension that keeps in line with prices is suggested, but I would go further than that—a scheme that as far as possible did away with the need for the supplementary benefit and the means test that goes with it.
Are the aims and the means of achieving them suggested in the White Paper neither helpful nor necessary, as the Liberals suggest? Can the aims be better achieved, as the Opposition suggest, by private and occupational schemes? I listened very carefully to the noble Lord, but still do not know what he means by


"giving basic security". I do not know how the Opposition will achieve that. At present 30 per cent. of our old-age pensioners receive supplementary benefit. But there are also a great many people who hover around the supplementary benefit level, and who have contributed to private schemes throughout their lives. I know people who receive a pension through private scheme of £1, 30s. and £3 a week, and as a result they do not qualify for supplementary benefit.
The hon. Member for Kenisington, South (Sir B. Rhys Williams) referred to such cases in the debate on 4th February. He spoke of the two old ladies who were very angry with each others, because they both had the same income, although one had saved up and could not draw a supplementary benefit and the other one had not saved up. There are many such cases, and we all know them. I am sure that those old ladies would prefer a scheme in which they both contributed and both received things as of right.
Do both Opposition parties wish to perpetuate the present system? Do they consider that it gives a firm guarantee of security in old age? Much has been said about minimum income levels. Do they feel that the present level of supplementary benefit is too high or too low?
There are about 65,000 private and occupational pension schemes, and the Opposition feel that the extension of pensions shoud be left to them. But there are about 1 million employers, and it would be virtually impossible to tackle the problems of transferability on change of job on a private basis if all firms came in. The range of contributions and benefits is so great that I do not believe that it would be possible. Even the freezing of rights, which is suggested in the White Paper for some occupational schemes, will be very difficult to achieve.
The proposed scheme is extremely sophisticated. It will need a great deal of explanation, which is one of the problems of such schemes. It will also suffer a great deal of misrepresentation, It was significant that the noble Lord mentioned the Daily Express, the Daily Mail, the Daily Telegraph and the Economist. A look at the; headlines on the day after publication of the White Paper would give an indication of such misrepresentation.
I want briefly to mention three points on which I have criticism to make. I do not think that the tying of future pension increases to price levels is good enough. Poverty is very much a relative thing. If our old-age pensioners compare their lot with that of their parents, they will feel that they are well off. But they do not do that. They rightly compare their standard of living with that of their children and neighbours. If their neighbours who are still working are to enjoy an increased standard of living, as they have done every year, whatever the Government, the pensions should be tied to that. That may help to dispel the myth that goes around year in and year out that wages are frozen while prices rise. Tying pensions to wage increases as a minimum rather than price increases would make the pensioners better off than they are. This should apply to all pensioners, and should apply in the biennial increase due this year.
Is the two-year review enough? Is it too much to expect of administration to have annual review of pensions and the other facets of the scheme? To a great extent, there is now an annual review in some cases, and it causes a great mix-up. Pensioners who are also on supplementary benefit received an increase last October. All the supplementary benefit books, leaflets and posters in the post offices were altered, and I am sure that a considerable amount of work was involved.
We hope, trust and believe that there will be a pension increase this year. But some pensioners who had some of theirs in advance as a supplementary benefit will feel robbed to some extent. It will be very hard to explain to people who have had a rise in advance that they are not really getting less than other people. But all these supplementary books are again to be altered. If possible, we should have an annual review of all benefits of this kind.
There is another factor which the man in the street will be worried about. If he pays to an occupational pension scheme, he gets tax relief. Many people will say, "Why do I not get tax relief on my 6¾ per cent. as well?" I appreciate the difficulties. The fact that there will be no tax relief will be a help to the lower-paid workers in a way, but this should be examined again because


it is one of those things which will be difficult to put over to people.
As a result of the scheme, people will want somewhere to go for advice and help, and there are not enough places or opportunities for people to get advice in our society. The offices of the Department are tending to become further apart and bigger, and the Government should look at the whole question of advice centres as they are doing under the Local Government (Social Needs) Act.
It has been said that many people will have a fall in their contributions but that more will have an increase. Are there not likely to be increases in the present contributions before 1972? If we are to have increases in old-age pensions and benefits, it is probable that the flat-rate contributions will have to be increased before 1972, in which case even more people will have a reduction when the new scheme comes in.
Despite my misgivings and individual criticisms, I congratulate my right hon. Friend and his advisers on the work that has been done on this. I believe that it is a workable scheme that people will welcome.

7.42 p.m.

Mr. John Pardoe: I say at once that I disagree fundamentally with the Conservative Party's views on this matter and, indeed, with the Government's White Paper. The Liberal Amendment has not been selected. It sets out a very different kind of case. I must start by saying what I, as a Liberal, think is wrong with the Beveridge scheme. Perhaps this is appropriate, because Lord Beveridge was one of the most illustrious Liberals of the century.
The White Paper, in paragraph 17, says:
The basic reason for this failure was undoubtedly the acceptance—which was almost unanimous—of Beveridge's recommendation that the scheme should be based on a system of flat-rate contributions and benefits.
That analysis is half right and half wrong. It is right to say that the scheme has fallen down because it was based on flat-rate contributions. It is entirely wrong to say that it has fallen down because it was based on flat-rate benefits. That is the issue I take with the Conservative attitude to future pensions

policy and with the Government's White Paper. I believe that what we have to have are flat-rate benefits paid for by earnings-related contributions, and I will spell this out.
Why do I oppose the Government's scheme? First, for the basic reasons set out in the Liberal Amendment, because I believe that the scheme means that the Government are entering into a field where they are neither helpful nor necessary. Many hon. Member on both sides have said that what they want in pensions is a partnership between private and State provisional. I, too, want a partnership, but the question is where one draws the line, and I believe that both the Labour and Conservative Parties have drawn it in the wrong place.
The Government should get out of graduated pensions. It is far too complicated a matter for Whitehall to deal with. This is not the scene for the heavy tread of Westminster boots. The graduated pensions scheme of the Conservative Government has been attacked as as swindle and fraud. I notice that the Spectator recently headed its leader on the new White Paper, "The Tory Swindle Mark II". It is as ridiculous for a Government to enter the field of bespoke pensions as it would be to enter into bespoke tailoring.
I also oppose the scheme because it offers nothing to existing pensioners. It offers a biennial review, but that is not a great improvement in the present situation. I remind the Government that paragraph 5 of the White Paper states that existing pensioners
… will continue to share in the nation's rising living standards.
However, in paragraph 12 it is implied that the standard of living of pensioners is far too low. I want to know whether the standard of living which the Government say is far too low is the share in the nation's rising living standards which they wish to continue, because I do not wish that share to continue. I want it to rise.
What has happened to existing pensioners during the last few years? In 1964, a single pensioner was receiving £3 7s. 6d. and now gets £4 10s. I know that some people will say that I am making a cheap comparison, but the Government are committed—and I accept


that they are sincerely committed—to a high priority for old-age pensioners. Let us, therefore, examine what would have happened to the old-age pension for the single person if it had been increased by the same percentage as Ministerial salaries. The pension would now be £5 17s. 6d. That is just one example If one compared it with executive salaries, one would find the same sort of increase. It may be a most unhappy comparison for the Government to accept, but it is an unhappy comparison for old-age pensioners to accept too.
I also take issue with the Government in their strange acceptance that my children should apparently pay for my pension, but that the Government will not have the guts to call on me to pay for my mother's pension. This is an odd style of morality.
What will the Government do with the £3,000 million surplus that they will get in the first 10 years? Some of this could be used for existing pensions. Will it be used to bolster up the market in Government securities? I believe that, whatever the right hon. Gentleman has said about using it in equities, it will be necessary for any Government of whatever political party in the foreseeable future to use it to bolster the Government security market and that it will not be invested in the growth investments, which is what a private occupational fund would do.
There is in the White Paper nothing for the disabled. I welcome the Secretary of State's remark that he hopes to introduce something on this in due course this spring.

Lord Balniel: The right hon. Gentleman did not say that he would.

Mr. Pardoe: The right hon. Gentleman gave some indication that he would.
There is also nothing for the single parent family and the White Paper maintains the earnings rule, to which I am completely opposed because I believe it wrong that we should deter pensioners from seeking work.
The Secretary of State made a great song and dance about the ability to contract out, and the hon. Member for Hertford (Lord Balniel) also made a meal of it. But I must tell the Secretary of State that, no matter what negotiations

he conducts with occupational schemes about this, it will be impossible. His next trick is impossible. One cannot invent or devise a way of doing it. I do not believe that it can be done. I believe that the Government will run into severe trouble on this.
Here, I would warn the private schemes, because the Life Offices' Association has been pretty wet about this If the State is in direct competition with private enterprise, the State will rig the rules to their own purpose, as they have done with the private airlines. The Secretary of State made great play over the fact that he had 65,000 schemes to contend with, and that it was impossible to ensure that all of these gave a satisfactory standard. He talked about an army of inspectors. I would ask him: how is he to ensure that the 65,000 pension schemes can possibly contract out of this scheme?
The administrative problems are immense. Let me bring it down to one specific question. I would like to know whether the scheme to which I now contribute is one which will be allowed to contract out. Is the House of Commons Pension Scheme to be allowed to contract out if hon. Members wish? If contracting out is so uncertain, as I believe it is, then this is a case for a pre-legislation Select Committee. The Minister said that he would not oppose this, and it is something that should be taken further. We are being asked to approve a White Paper which is incomplete on a crucial issue. He did not say that he would bring in a Bill which would be complete; he rather implied that we would, in due course, be asked to approve a Bill which would be incomplete on this crucial issue.
When all the process of democracy is gone through in this House the whole thing will be tidied up in a neat little Order. There is a fundamental principle of Parliamentary democracy in volved here. It is quite wrong that we should discuss this Bill and the whole of the pension scheme without being able to discuss the major issue of contracting out.
May I now turn my attention to the Conservative Party. I have great sympathy with the hon. Member for Hertford—I always have when he is speaking on this subject. He is, for instance, speaking


to a remarkably vague Amendment. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) could hardly restrain himself from saying that he preferred my Amendment to that which the Conservative Party had tabled. He did not say it, but he implied it, or at least I detected that implication, but that may be my false optimism.
The Conservative Party has no alternative to the Government scheme. I do not know how much Thompson newspapers paid the right hon. Gentleman to write his article in the Sunday Times recently. It would have done much better to have paid the money to me, because it would have got far better value. It got a very vague and waffly article—very well-written, in a very good style, but It said nothing because it had nothing to say. He has no alternative scheme at all.
The Tories are saddled with their own graduated pension scheme. As I said, the Spectator has declared that this one which the Government are introducing is the "Tory Swindle Mark II". The Tories, having first dipped their toes in this nonsense of State graduated pension schemes, can hardly blame the Government for jumping in head-first after them, and that is what has happened. The hon. Gentleman said, with the tremendous depth of sincerity of which only his oratory is capable, that he wanted to ensure a decent standard of life for old people—do not we all? He was careful not to define what that decent standard of life was. No figures entered into it, no relative concepts, with such things as average national wages or anything like that.
Then, what was the most fascinating passage of the whole of his speech, which I interrupted, in company with the Secretary of State, was when he went on to say that he did not really object to the State being involved in earnings-related pensions. As I understand, he does not object to what I call "bespoke" pension policies. He believes that the State can be involved on this side of the line that I have drawn. Here again, he separates himself quite clearly from the basic principle which I am laying down in my attitude to pensions. If he is prepared to go on that side of the line he, too, is attacking the occupational schemes in just the same way, if not to as great a degree, as the Government.
The hon. Gentleman said that no sane individual would invest in a State scheme because of the various examples of what has happened to Government securities over the years. Let me hasten to say that the main reason why I would not put my money in a State scheme is because of the Tory swindle with graduated pensions. If ever there was an example of how a Government could waste an individual's money, that was it.

Lord Balniel: Why did the hon. Gentleman not contract out?

Mr. Pardoe: I cannot contract out. An employer can, but I have had numerous complaints from constituents because they, as individuals, could not do so. This presumably is the corporate State which the Conservative Party is ushering in—the admass can work together but the individual must never work as one. After four years in opposition, the Tories have been caught by this White Paper with their pants around their ankles, trying to cover up their immodesty with a committee.
It is not the first time that where the Liberals have a policy the Tories have a committee. I am aware that the noble Lord has his excuse. He will not repeat it here, because he might find that his audience in this House would not accept it as easily as his previous audience. Speaking to the conference organised by the National Association of Pension Funds on 17th February, 1969, and I am sorry that I was not invited, too, he said:
It was quite beyond the competence of Her Majesty's Opposition to work out a scheme of this kind. The Government have spent four years with computers.
I do not believe this. It is the job of the official Opposition to come here with a worked-out scheme. It is not good enough to say that they do not have access to computers. What do they do with the £2,600,000 they have just raised? Why do they not buy a computer? Give one to us, we could make much better use of it.
Now I come to the Liberal scheme, and I take up what the right hon. Member for Lanarkshire, North (Miss Herbison) said. As to her point about the Liberal Amendment being doctrinaire, I accept this in one sense, because it states where we draw the line between what is the State's rôle in pensions and what is the


rôle of the private sector. The Amendment does not rule out the State's rôle. We believe that the State has an important rôle to play. No party that follows in the footsteps of Beveridge would dream of supposing otherwise.
The hon. Member for Hertford said that we can always make promises. Unfortunately, so can other politicians, as this country has seen to its detriment for so long. Let me quote from what New Society said about our scheme. It does not say anything about it being the most ambitious scheme, but it says some interesting things. This is the issue of 20th August, 1963, which said:
Undoubtedly the most interesting feature of the new scheme is its handling of the division between the State and occupation schemes, perhaps the most imaginative solution so far to a problem which has concerned policy-makers of all parties.
"Imaginative solutions" do not just come to parties who do not hope to form a Government within the next 18 months or so.
The article continued:
The Liberals neatly get round all these difficulties by providing the basic pension through the State (officially above subsistence level) and virtually compelling occupational schemes to take the level of benefits further.
We believe in a partnership between State and private provision, but we believe that the line should be drawn here: that the State's rôle is to provide a basic flat-rate pension, large enough to live on without supplement. What is that level? That is the crucial question which the noble Lord did not answer. The level, which I have stated often enough, is for a married couple half the national average wage. That is to say, since the average national wage at present is £23, a married couple under our scheme would get £11 10s. We are not proposing that this should happen immediately, but over a period of seven years.
The great advantage is that once the pension is tied to this proportion of the average national wage, the living standards of the old-age pensioners are tied to the rising prosperity of the community generally. I would be very happy to go forward to my retirement with that as a basic element in my total insurance provision. In mathematical terms, under the Government scheme, for a person earning £23 a week the pension would

amount to £9 15s. 6d., whereas under our scheme it would be £11 10s. That is my calculation and I am open to correction on the mathematics.
Over and above this level we would ensure that there was a supplement which was related to the individual's earnings before he retired, and that supplement would be made up by private occupational scheme. We have said that we would accept a total level of two-thirds of previous earnings as the minimum acceptable target. In other words, the State would provide a basic pension, and the occupational scheme would have to top that up to a level which was two-thirds of the previous earnings.
The great advantage of allowing occupational schemes to do much of the work, apart from the difficulties of administration in the State doing it, which I have already spelt out, is that it is possible by occupational and private insurance to bring into the social security scheme funds which cannot be obtained through taxation. There is no possibility of raising taxation or State contributions to the level which will attract those funds which can be obtained through a private occupational scheme.
I have said that we would compel occupational schemes, but the right hon. Gentleman the Secretary of State said that this would require an army of inspectors. I do not believe that for one moment. If some employers were unable to provide this level of occupational scheme, and I accept that there would be some, we have stated that the State would have to provide a fallback scheme. I go a step further here. I believe that this would be best administered by insurance companies, if necessary paid by the State to do so—a service fee or a subsidy. I am attracted by the example of Switzerland, where a great deal of insurance is done in this way; the State pays insurance companies to administer schemes on its behalf. Since we are trying to keep as much out of the jaws of Whitehall as we can, this would be a better way of doing it.
The total scheme would be paid for by means of a social security tax, and this would be entirely separate from any other taxation fund. It would not be raided for east of Suez follies, or for going back to Malaya, or any of the other things which the Conservative Party


wishes to do; it could not even be raided for building roads. It would be a social security tax and, in a sense, a social security fund. One-third would be paid by the employee and two-thirds by the employer.
I accept straight away that there is a greater degree of redistribution in our scheme than in the Government White Paper. I do not find this any criticism; I accept it as desirable. One thing which worries me about the Government's scheme is that I am not at all sure that I want the State to be involved in preserving the inequalities of working life in old age. I accept that those inequalities exist and that in any kind of society we can devise they will be preserved in old age, but I am not sure that I want the State to do it for me, which is what will be involved in the Government scheme.
The Government and the Conservative Party have got their pensions policies wrong. I do not make a forecast about the result of the next election, but one of them will be implementing the next pension scheme for this country, and. unless they change their minds very soon, the country will be saddled with a disaster for a long time to come.

8.4 p.m.

Mr. Douglas Houghton: I apologise to the House and to my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) for having been away from the Chamber for about an hour. I did not hear the concluding part of the speech of the hon. Member for Hertford (Lord Balniel) and I also missed part of my right hon. Friend's speech. My right hon. Friend the Member for Lanarkshire, North and I collaborated for more than two years on the preparations for the Government's scheme, so we have lived with all its excitements, disappointments and problems. The White Paper represents the sort of framework of the new scheme which I envisaged when I was working on it.
I will deal first with the revelation of the new scheme from the Liberal Party. The quarrel between the Liberal and Conservative Parties which we have just witnessed was highly diverting; may it long go on. If the Liberals can keep their attention on that side of the House it will suit us.
A scheme of graduated contributions for flat-rate benefits would be an unacceptable form of social taxation. It was turned down flat by the trade union movement when the idea was put to them some years ago. It goes wholly against the trend of social security schemes throughout the world. The Liberal Party must bear in mind that once the contribution is dissociated from the benefit, the contribution becomes a form of taxation in the mind of the payer. The payer will then look at whether the contribution is equitable by reference to his ability to pay and by reference to the benefit which he will derive from it. As we all know, proportionate taxation fails when it gets so high that reliefs and abatements must be introduced to make it equitable; one then enters the realm af progressive taxation.
One of the great merits of the contributory scheme is that either a flate rate form of taxation or a proportionate form of taxation can be retained beyond the point at which it would be acceptable if levied for general purposes. The fact that it is related to social benefit makes it acceptable. I am, therefore, astonished that the Liberal Party should think it possible to finance a high level of flat-rate benefits by a still higher level of graduated contributions.
Our scheme has already departed from the flat-rate concept in unemployment and sickness benefit. The point of departure from the flat-rate concept was in 1966, except for the rather miserable sleight of hand called the Boyd-Carpenter scheme, which was a financial operation and not a measure of social improvement. This scheme is the logical extension of the introduction of earnings-related benefits, albeit in 1966 for short-term benefits, but at the same time breaking into the new area of widows' allowances. Our present scheme, with its flat-rate benefit and flat-rate contributions, is one of the rare species of social security schemes throughout the world.
Nearly every country has gone towards earnings-related benefits, for the obvious reason that it is impossible to provide the financial support needed when earnings cease solely by a flate-rate benefit. There must be some relationship between the social benefit and earnings if the standard of living is to be maintained


reasonably during a period when earnings have ceased.
The Liberal idea is a non-starter, and I do not think that it is worth spending more time on it except to criticise at one and the same time the point put forward by both the hon. Member for Hertford and the hon. Member for Cornwall, North (Mr. Pardoe) about the rôle of the private contributory scheme. I am the last person to criticise the provision of the occupational scheme. I happen to enjoy the benefits of one. But, if we are frank, we know that it cannot do the job envisaged for it by the noble Lord and the hon. Member for Cornwall, North. There are some very good schemes and there are a great many of them, but it is not feasible for supplementation of a flat-rate benefit to be provided by occupational schemes on a universal basis if it is to be done adequately.
Moreover, we know now what are the problems of transferability. I doubt whether we shall get transferability in the occupational schemes to anything like the extent hoped for at one time. This will be a great pity. It will be a social and an economic drawback. The spectacle of workers drawing the accumulated contributions in their occupational pension schemes when they leave their jobs to spend on current needs and thereby destroy what should be the support for their retirement is a pitiful one. I would like to stop that but, as long as these schemes are free and independent and are not to be transferable, it is difficult to know how people are to retain the benefits for which they have contributed when they leave their jobs. That line of thought on the part of both the Liberals and the Conservatives is not the answer to our present problem.
However, we all agree that we cannot go on as we are. We have seen the breakdown of the flat-rate scheme. We have seen the drawbacks of the existing graduated scheme. It is one which it is impossible to top up to take account of the fall in the value of money, because to top up the benefits in the graduated scheme would be unfair to those who have been contracted out and who have paid a higher contribution for their flat-rate benefit because of it. This has made it impossible to do anything with the graduated scheme that we have now, so we must go on from here and think of a different and more adequate scheme.
It must be obvious to hon. Members on both sides of the House that some of the major decisions on the White Paper had to be taken very early on in order that work could be done on them. The alternative would have been to waste a great deal of time. One of the first decisions that had to be taken was whether this should be a pay-as-you-go scheme or whether it should have any element of funding. This was not easy to decide, in view of what had been part of Labour Party policy up to 1963 when we said in the booklet entitled "New Frontiers on Social Security" that we envisaged some degree of funding of the new scheme, with a national superannuation fund and the investment of the considerable resources accumulated in the fund in the hands of trustees.
The decision on funding had to take account of the fact, first of all, that there was no need for it in the interests of beneficiaries. Being a State scheme, their security was assured, so we had not to fund for security. The private occupational scheme has to fund for security. There was no need to fund for capital appreciation as a hedge against inflation, because the State is able to take its own steps to hedge against inflation in that it has the power to increase compulsorily the levy made for the scheme and so improve the benefits to take account of any fall in the value of money.
It was not necessary or desirable to fund as a form of compulsory saving. We badly need more savings, both institutional and personal, but I would be against using a State superannuation scheme as a form of compulsory saving. We have to get our inducements to save other than by compulsory levies under the guise of an insurance scheme.
When we came to look at it from that point of view, there was no need for funding. There was another very big difficulty, namely, that if there are funds in the hands of national superannuation trustees which are so vast in relation to the amount of money available for investment generally, the relationship between those trustees and the Government on the one hand and the Stock Market on the other may be extremely delicate and possibly full of danger at times. Anyhow, without going further into that, the decision was taken that it should be a pay-as-you-go scheme.
There are certain implications which flow from that decision about which we must be clear in looking at the White Paper. For the purpose of what I shall say about this, it is desirable for me to strip the scheme of some of the mythology of insurance. I do not do it in any unfriendly spirit. We have to be realists here about what we are doing, and we know that this is not insurance. We know that it is a redistribution of income by compulsory levy between the younger and the older generations, between those who are at work at any time and those who, for good reasons, are no longer working. The largest groups of those are pensioners and widows.
For identification of contributions and benefits, the word "insurance" certainly captivates the imagination and good will of the great mass of the people. But there is a danger that, in making contributors more willing to pay because of the concept of insurance, at the same time we build up strong claims to entitlement for future benefits as of right which are no more than a moral obligation. We also bring into the scheme the whole apparatus of contribution qualifications, many of which have no financial significance, which are irksome and even unjust, but which maintain the prestige of the word "insurance".
The truth of the matter was given the other day in reply to a Question. We were told:
The maximum contributions for pension that could have been paid by a man and his employer is about £685 and the maximum that could have been paid by a woman and her employer is about £655. Such a man now retiring at age 65 and his wife age 60 could expect to receive about £7,000 by way of retirement pension and the single woman now retiring at age 60 could expect to receive about £5,100. A similar calculation for the single man shows that he could expect to receive about £3,200."—[OFFICIAL REPORT, 3rd March, 1969; Vol. 779, c. 10.]
That is the truth about insurance. We see that the current contributors are paying out to those on benefit far more than their own contributions would entitle them or even give them claim for. This is what I mean by the discharge of a moral obligation.
In the White Paper we are committing ourselves to make the moral obligation statutory by having a biennial review. We promise that as a minimum the lost

purchasing power of the pension since the previous review shall be restored. Hopes are being built on this pledge of a minimum increase that there will be something on top the represent a share of increasing prosperity and the grant of an increase in the real value of the pension. That is an obligation that we are putting on the next generation of contributors as well as upon ourselves.
We are being asked to write into the law firm promises of future benefits to ourselves. These promises will not be fulfilled out of any contributions that we will make. A true insurance system would accumulate a reserve fund sufficiently large, as we all know, to meet the future financial obligations. Private insurance in most cases has to do this. But we are providing for ourselves by placing obligations upon others who will have to pay us the money out of effort and resources that we have not handed down to them.
Nevertheless, it can be argued that the social contract, if not the insurance contract, is valid and fair. That is what I believe it to be. The social contract says in so many words, "We will support the aged, the widows and others who are in need of benefit out of our production and earnings now, in return for a similar obligation being put upon those who come after to do the same for us". That is the social contract. That is the principle of the pay-as-you-go scheme. But this is not the principle of an insurance scheme.
I think that the principle of reciprocity as between one generation and the next is fair and acceptable under one condition. This is really the gravamen of what I am trying to say. We must not impose on the next generation of contributors burdens greater than we are prepared to bear. This I regard as fundamental. This is what I fear the White Paper proposals may well do. The last page of the White Paper foreshadows this very happening.
I think that we should fix the contribution now that we firmly believe will meet the obligations of the scheme at least until the turn of the century—30 years from now. If we do that we shall be playing fair with the younger generation which will come on. We must not demand from them any higher proportion of their earnings in contributions than we are prepared to pay.
I grant that the White Paper carries this principle up to a point, because on the last page it envisages that the contribution fixed at the outset would stay put for about 20 years. After that it might have to be increased, and increased again at the turn of the century. I think that we ought to be more certain of an enduring level of contribution for a longer period than 20 years. We ought to do our best to estimate our own obligations and fulfil our part in the matter at the same time that we place this statutory duty upon those who follow us.
This might mean that the contribution would have to be somewhat higher at the outset than is now proposed. That would also mean that larger surpluses would be earned in the earlier years. That raises the question of what we are to do with the surpluses: either the higher ones under what I think is the right line, or the smaller ones in the White Paper.
We must bear in mind in both connections that we still have to take account of the loss of revenue by whatever arrangements there may be for contracting out. We all realise that the loss of revenue will hit the Fund much sooner than the Fund will gain from the reduced benefits paid as a result of any bargain struck on contracting out. So, to begin with, we must bear in mind that the Fund will suffer losses.
Subject to that, the aim should be to hand over to the next generation of contributors some savings from the surpluses which we could accumulate to provide a financial cushion against seen and unforeseen extra burdens which may arise in the next generation.
For example, we are bequeathing to our successors some demographic problems, the full measure of which we have not yet taken. We see from the White Paper that the proportion of those over retirement age will increase. At the same time, it is expected that the proportion of dependent children will increase, too. Between now and the turn of the century we may have a much higher ratio of dependency in relation to the working population than we have had for a very long time.
I think that we must do our best to forecast the burden which it will be adequate for our successors to bear, but at the same time reinforce that forecast by handing down to them accumulated

reserves which have been prudently and profitably invested.
This means that we must make a serious challenge to the idea that funds from the State superannuation scheme can be invested only in Government securities. We already have a National Insurance Fund of a nominal value of over £200 million, we already have a National Insurance Reserve Fund of a nominal value of £1,170 million, and we already have an Industrial Injuries Fund of over £300 million. They are all losing their value. They are all yielding a low rate of interest, and none of them is of any more value to the Fund than the scrip on which the money is written. I think, therefore, that the investment of these surpluses on the lines of prudent, free investment is desirable.
My right hon. Friend said that the Government were prepared to reflect on that. I certainly hope that they will, otherwise the surpluses will go into the mists and join these financial apparitions that are called the National Insurance Reserve Fund. One can never call on it. One can never use it. What folly it is to invest in oneself. One can never get the money back. If one wants to draw on reserve fund investments only with the Government, the Government have to replace the money. They must either borrow more, or tax more, or let one go haywire on the gilt-edged market. It is therefore desirable to have these investments spread in the way that the occupational pension funds spread theirs.
I come, now, to another point which I think exposes the scheme to considerable danger, and that is the 20-year transitional period. This really is a point of extreme political weakness, and we have to guard against it. I think that we have to erect strong defences against the pressures that will come during this period. Let us be candid. The fact of the matter is that the new scheme could stand the additional benefits from the first year. There is no need to spread them over 20 years for financial reasons. The higher contribution will come in from the appointed day. That is how the surpluses are to be built up. The surpluses will flow from more revenue than there will be outgoings, so it would be financially possible to grant the full maturity of the scheme from the first year.
Why, then, is it not proposed to do that? The 20-year transitional period is the way in which we damp down the demands for the existing pensioners. That is really how it is done. If the new benefits came into operation in one go, the discontent amongst the existing pensioners would be very great indeed, so this 20-year period is really a phasing into the new scheme, accompanied perhaps by a period of attrition on those who might grumble about it.
Will we be able to maintain this 20-year period? Is it too long? I rather think it is. Certainly if this period is to be maintained it will be abundantly necessary to commit ourselves to the investment of the surpluses and put them beyond the reach of political pressure, otherwise I am sure there will be a temptation to use them to fulfil political demands by those who will feel that they are entitled to share in the prosperity of the National Insurance Fund.
That completes my two main points on the White Paper. My only disappointment about the proposals with regard to the benefits relates to women. The House has heard me on this subject so often that I shall not repeat the speeches that I have made before. I was hoping for a better charter for the women in this scheme. I fully support the removal of the married woman option. My right hon. Friend the Member for Lanarkshire, North and I are united about that.
I fully support the additional benefits being given in cases of breakdown of marriage, but there is much more to be done there. Do I have to emphasise the wretched conditions of many women in Britain today whose marriages have ended for reasons other than widowhood? When one looks at the figures of the Supplementary Benefits Commission, one realises that the real poverty in Britain today is amongst women. It is to be found among women who are alone, and women with children. That is why I think a scheme of this kind, to be applicable to the twentieth century, has to take into account the additional hazards which, for conventional or other reasons, Beveridge did not take account of, and which we are so slow to take account of. We have to regard the divorced, the separated, and the deserted wife as having a claim on social security

equal to that of the widow. After all, her marriage has ended, and very often with less financial support than many widows have.
That side of the matter disappoints me, and I am glad that there is to be a further investigation into the conditions of families in that plight, but I think we have to be bold about this when the time comes to review the White Paper in the light of further investigations.
My conclusion is that this represents the scheme for the future. Wisely and prudently framed now, with due regard to the obligations we are placing on the next generation, it will surely give them support in retirement, sickness, unemployment, widowhood and any other hardships of life, and will give them a reinforcement of their economic and family life which those who come after will thank us for having designed between 1969 and 1970.

8.36 p.m.

Mr. Paul Dean: The right hon. Gentleman the Member for Sowerby (Mr. Houghton) has broadly praised the White Paper for the advances which he feels it will bring about in our social security arangements; but with the very considerable knowledge he has on these matters he has also asked some very pointed questions about the financial viability of the scheme. In my view, the main weakness—I believe a fatal weakness—in the thinking behind the scheme is that it fails to distinguish clearly between the financing of pensions today and savings for pensions tomorrow.
When my noble Friend the Member for Hertford (Lord Balniel) made that point in his speech I was very struck by what appeared to be the look of surprise on the face of the Secretary of State. He almost gave the impression that this particular point had not really occurred to him, that he had not given very much attention to it. I believe that there is the real danger, as a result of mixing up these two concepts, that we shall fail in the first place to provide adequately for pensions today and we shall equally fail to create the right conditions for savings for the pensions of tomorrow.
Leading from that broad strategic mistake, as I regard it, there are, in my view, three particular aspects to be mentioned. There is, first, the point mentioned by the


right hon. Gentleman the Member for Sowerby, the 20 years' maturity. The idea is that the scheme will not mature fully until 1992. We are to have a long period of maturity. I would have much preferred that the Government had set themselves more modest objectives which could be achieved more quickly, because I do not believe for a moment that they will be able to hold this 20 years' maturity. We all know what happened to the Beveridge Scheme. There was in that scheme the idea of a 20 years' maturity period and we know what happened in practice—the inevitable pressures under which these arrangements had to operate and the scheme coming into operation with the full level of benefit right from the start
Just as that idea of a long period of maturity failed in those days, because it came up against harsh political realities, so this concept will fail in the present conditions as well. Just look at what the position will be. We shall have the pre-1972 pensioners on the old flat-rate pension, plus any additions which are given so that we shall then have the very odd phenomenon of the one-twentieth pensioner in the first year of the scheme, the two-twentieths pensioner in the second year of the scheme and so on. The effect, when one looks at pensioners as a whole, will be that the younger pensioners will be getting a bigger pension than the older ones. This may look financially right, but it will certainly not appear to be social justice to pensioners or to the country as a whole.
What we want in a State scheme is the opposite. One can argue strongly that need increases with age and that, far from younger pensioners having a higher pension, the basic scheme should be the other way around. No Government could hold this 20-year maturity period with the anomalies and strong feeling of social injustice which it would create. That period will be a myth.
The second myth is the so-called surplus, which we are told will be £400 million in the first year, building up to about £3,400 million by 1988. But what will present pensioners, the disabled or the widows think about that surplus? They will say that it should be used to help them now rather than saved to give fat pensions to those retiring in 1992 and

after. No Minister will be able to resist those justified pressures. That, too, will be a myth.
If these things happen, what will be the position for contracting out? The White Paper and the Secretary of State have said that it will depend on the surplus in the early years. The right hon. Gentleman said that, the adequacy of 6¾ per cent. aside, it would depend very much on the extent of contracting out. If, as I think, the surplus is a myth, the Secretary of State at the time will have to say, "The surplus has gone. I am very sorry, but I cannot allow contracting out, because I desperately need more contributions to meet the commitments for pensions and other benefits."
What else could he do but clamp down on contracting out? He could ask for a bigger Exchequer contribution but, in present economic circumstances or any circumstances which are likely for some years ahead, the Chancellor would refuse. He could also put up contributions even more than is envisaged already, but this would be unpopular and impracticable. He will inevitably take the easy way out. Contracting out will be the casualty.
I asked the right hon. Gentleman during his speech for an assurance that, whatever the position of the fund, he would not alter the terms of contracting out through the abatement arrangements, if the expected surplus did not come about. He said that that was a very delicate question which he would have to consider and that he could not answer at that moment.
That was a revealing remark which justifies the Amendment, because it means that we are being asked to approve a scheme which exists in no more than the vaguest outline, with little indication of answers to the critical questions we have asked about its viability.

Mr. Peter Mahon: Does the hon. Gentleman really believe that contracting out would make such a difference to a scheme if it was actuarily sound? It is incumbent on the Government to arrange matters so that the scheme is sound. On humanitarian grounds it must allow for a certain degree of contracting out because of the contingencies which occur during the lifetime of every employee. These contingencies——

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Gentleman is making a rather long intervention.

Mr. Dean: I think I know at what the hon. Gentleman is getting and I wish that I could agree with him. The trouble is that if the scheme gets into financial difficulties, as I expect it will, the easy way out will be to clamp down on contracting out. The Government Actuary's report, which is part of the White Paper, proves this because, dealing with contracting out, it points out that an immediate reduction in contribution income would result in a significant reduction in benefits.
I fear that, if they are not careful, occupational pension schemes will find themselves being led up the garden path by fair words but that their future will be built on shifting sands. I do not believe that such a Government scheme can provide a firm foundation for contracting out, or that the partnership between the State scheme and occupational schemes, which the right hon. Gentleman says he wants to see, can be possible.
If the development of occupational schemes is held up or, worse still, contracts under the pressures of the State scheme as a result of the conditions laid down for contracting out, that would be extremely bad, not only socially, but economically.
The Secretary of State said that there were gaps in occupational pension schemes and that some people could not, almost by definition, be covered. I would not claim that these schemes are perfect and I regret that we have not reached the stage when better cover can be provided for widows. The right hon. Member for Sowerby referred to transferability. There are ways to improve occupational pension schemes and it is no argument against encouraging them to fulfil a larger rôle to say that there is a small percentage of the community who cannot be covered. Many of them could be covered by, for example, federated schemes. In any event, if there is a small nucleus of people who cannot be covered because they are changing their jobs rapidly, or for a variety of other reasons, there is no reason why public trustees should not run a genuine

insurance scheme in competition with the market to cover these people. Then they could have the choice of getting the cover which the vast majority of the population get through occupational schemes.
If it is necessary to have a fall-back scheme of this kind I would be prepared to support it so long as it is a genuine insurance scheme operating on exactly the same principles as a normal occupational pension scheme. It would be extremely bad socially if we got into the position in which the State scheme became larger and more expensive and doubly wrong because in such a situation the higher the earnings of a person the worse would be the bargain. That is one of the fundamental differences between this scheme and the scheme of my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter).
Figures have been given about the amount of savings generated. This encourages the concept of a property-owning democracy, on which I believe both sides of the House now agree, and provides the future seed corn for prosperity. Equally, it gives to the Chancellor of the Exchequer of the day an important weapon when dealing with a high level of consumer demand. The present Chancellor has virtually admitted that however high he puts taxation—and he has done that a great deal in recent years—he cannot succeed in checking consumer demand. The only way to do it is by encouraging voluntary saving. One of the best ways to do that is to ensure that the occupational pensions scheme movement grows and that whatever arrangement is made through the State scheme a firm basis can be provided on which occupational pension schemes can develop.
It seems extraordinary that in these days when we have become far more prosperous as a country than in the days of the Beveridge scheme the Government are still producing ideas which involve an ever-increasing extension of the activity of the State in this field. Surely the more prosperous we become the more we should be able to concentrate on those sections of the community who are in genuine need and the more we should encourage the growing number who are


able and willing to provide for themselves to do so through occupational schemes of their own choice.
I hope that when he replies the Minister of State will deal with the very valid points and criticisms that have been put forward from both sides of the House. I beg him, above all, when the debate is over, to think again about the White Paper and to take into account the substantial criticisms made from both sides of the House.

8.58 p.m.

Mr. Ted Leadbitter (The Hartle-pools): At this late hour I think that I can put my notes aside. I believe that I am the only hon. Member who has been present since 2.30. I shall be brief and speak for not more than about eight minutes.
The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) unfortunately let himself down when he suggested that this was not a pension scheme but a blueprint for a General Election. Up to that point his speech was interesting, constructive and highly useful. His considerable experience in this matter was, unfortunately, spoilt by that reference. I think it was the only reference today which the House could not accept, for the tone of the debate has been one expressing sincere concern from both sides for the position of the retired person.
In considering the retired person, we must think in terms of priorities and of how best to deal with that important citizen. Our priorities are wrong. The purpose of the White Paper is to produce consultations based upon the principles within it, in order that legislation can be drawn up to be implemented in 1972. That is a long way off. I would have been happier if we had been discussing solving the problem that faces the old-age pensioner now.
It is a pity that in the White Paper there is provision for a transitional period of 20 years. This, added to the date before us for implementation, puts right out of court the kinds of hopes and aspirations that old-age pensioners have at present. This also applies to those who are approaching retirement age and are, therefore, anxiously noting the discussion of the proposals in the White Paper.
The right hon. Member for Sowerby (Mr. Houghton) pinpointed this basic weakness in the White Paper. There seems no sense in introducing a transitional period of such length—the first time in the history of legislation of this kind. Britain is planning for economic prosperity and growth. If we have not the capacity in the first year fully to introduce the scheme, which is based upon the new principle of earnings-related contributions, there is something wrong with the ingenuity of those in Whitehall and in the three parties.
I trust my right hon. Friend the Secretary of State takes note that the poverty among old-age pensioners today, and the gap between the increasing standards of living of those at work and those who are retiring, or who will be retired in 1972, is such that we cannot afford blindly to pursue the concept of a transitional period. This militates against the best interests of those who seek a larger slice of our increasing growth and prosperity.
We have not gone far enough in this White Paper to bring relief to women. There has been considerable study of the problems of women, particularly the discriminations against women in taxation and social security. Since 1964 the Government have introduced a considerable amount of legislation to help the separated, the divorced, and the widows, but there is a need for a comprehensive piece of social security, such as that before us now, to extend the concept of equality.
When we study the White Paper further as a basis of legislation, I hope that we will be able to pursue firmer lines of a kind which will give comprehensive support to women in the social security field.
The relationship between the State scheme and occupational schemes has been discussed. Some hon. Members have not been honest in discussing this relationship, nor in describing the facts of occupational schemes. Even today the benefits arising from occupational superannuation schemes range from a small sum of under £1 to over £4. Twenty per cent. of those in occupational schemes receive under £1; 20 per cent. receive between £1 and £2; 10 per cent. receive between £2 and £3; 10 per cent. receive between £3 and £4, and 40 per cent. receive just over £4. Therefore, by no


stretch of the imagination, despite the claims about the growth of occupational schemes, can those who benefit from such schemes claim to have the type of cover which is designed to abolish the subsistence or poverty levels in retirement. This excludes a large number of people who, because they are manual workers, are not allowed to join such schemes.
There is great need for a partnership between a State scheme and occupational superannuation schemes. The hon. Member for Cornwall, North (Mr. Pardoe) retreated from the concept of State responsibility as We on this side see it. The Conservative Party has been Machiavellian—it has criticised but produced no alternatives. The flat-rate contribution scheme has been found to be outdated. Consequently it has not carried on that rôle of partnership with the growing number of occupational schemes which can bring to the vast majority a condition of retirement which is above the subsistence level.

The Motion asks the House to invite the Government to pursue consultation and makes it clear that the White Paper is a basis for legislation. It is in that spirit, without any rigid commitment to the details of the White Paper, but accepting the general principle of earnings-related contribution, that the House should approve the Motion. The Liberal Party has contributed nothing and the Conservative Party has dodged everything in this debate.

9.5 p.m.

Mr. Marcus Worsley: The Secretary of State and his right hon. Friends have tabled a Motion not just to take note of the White Paper, not just to approve it in general terms, but to approve it as a basis for legislation. They must have known when they put it down in those terms that we could not accept it, for we have not yet been given the information on which we could make a decision.
My right hon. Friends have long made clear—because it has not been a short time in the gestation—how we should judge the White Paper when it came out. Yet when the right hon. Gentleman produces his scheme he does it in such a way as to leave unanswered the questions he knew we would ask. In other

words, he has taken the decision to force a vote tonight.
But at least I will give the right hon. Gentleman this, since he is a controversialist and enjoys controversy: the result at least has been a debate in which we have sought to set out the differences between us. Because there are differences; I do not agree with those hon. Members who say that in this sort of debate we should not talk about party differences. Of course, there are huge areas in common, but it is as well that the country should understand both the areas in common and the differences.
When the hon. Member for Manchester, Gorton (Mr. Marks) tried to define our common objectives I found little to disagree with; I believe that our final objective is the same. We all want to see all our people enjoying in retirement a dignified old age, an adequate income as of right, and I think that we all accept that the income in question must have some relationship to the income earned in working life.
We were delighted to see the right hon. Member for Lanarkshire, North (Miss Herbison) back in our midst for what I think was her first speech on the subject since she was Minister. She asked what our objectives were. That is a fair enough question, and I do not think that anybody in the House would disagree about the one I have described. The difference comes in the means of achieving it.
We passionately believe that it is better for both the individual and society if the individual provides as much as possible for himself. We believe that people want to do this, and they increasingly want to do it. There is a sort of worldwide revulsion against over-government. Perhaps some of the exponents of it do not seem to be our natural allies, but the trend is strongly away from over-government and towards self-reliance. Yet on these issues the White Paper is silent or inconclusive; above all, on the critical issue of contracting out.
The right hon. Lady appeared to think, and I want to disillusion her if she did, that my noble Friend the Member for Hertford (Lord Balniel) had advocated leaving everything to private and occupational schemes. The hon. Member for Westhoughton (Mr. J. T. Price) seemed to think the same. This is not our


view. We do not believe that everything should be left to the private schemes, but we say they must have the conditions in which they can flourish. We believe that there is a very important rôle for the State in this sector. The growth of private and occupational schemes was one of the happiest results of Conservative government.
Figures have been given. The hon. Member for Westhoughton gave many, which I shall not repeat, showing how half of the employed persons and two-thirds of employed men are in occupational schemes. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) made an outstanding speech, as the House will agree. One of the main objectives of his Act was to provide for the encouragement of these occupational schemes, but what a difference when the Secretary of State presents his White Paper! This is not a principal part of his plan. He has left out the very issue we are talking about. He speaks only in general terms about the principle of contracting out.
The right hon. Gentleman is laughing at the statement that he has left out of the White: Paper detail on which we can judge whether or not it is possible for private and occupational schemes to contract out. Why does he think that funny?

Mr. Crossman: Funny or not, what we left out was a detailed agreement which we could have achieved only by secret negotiation before coming to the House. I repeat the question which I asked of the hon. Member for Hertford (Lord Balniel). Does the hon. Gentleman say that we should have reached this agreement in detail before we came to the House? If not, do we not need the White Paper, which gives the basis of the case and a framework for the negotiations?

Mr. Worsley: But the right hon. Gentleman is not just asking the House to take note of the White Paper. He is proposing it as a basis for legislation.

Mr. Crossman: On the basis of further consultation by the Government with representative interests. Surely that is perfectly reasonable.

Mr. Worsley: The right hon. Gentleman cannot get away with this. He must realise that this is critical to us. Perhaps it is not critical to him. But if that is so

we have established a difference between us.

Mr. Crossman: At last! Well done!

Mr. Worsley: This is a critical matter to us and we agree now that the light hon. Gentleman does not regard it as critical. There at least is some clarification from the debate. But not all his hon. Friends take his view. The hon. Member for Westhoughton called it the nub of the issue.
It is not only the question of contracting out that we are concerned with. One does not only provide for old age only by taking part in pension schemes either in the State or in private schemes. Every purchase of a house, every purchase of a share, every piece of saving is provision for old age. So the second reason why we cannot at this stage support a White Paper of this nature is that already our tax structure discourages saving. Already our system is more sharply progressive than in any other comparable country. Yet this plan will immensely increase the burden.
As the hon. Member for Gorton pointed out, national insurance contributions are no longer chargeable against Income Tax. Thus, the progressive characteristics of the graduated contribution in the right hon. Gentleman's plan will be added to the progressive characteristics of our existing system of Income Tax. It makes no difference to argue that the contribution is not taxation. What we are concerned with is not words, but the actual impact on the individual and the country. The fact is that the right hon. Gentleman will add, by this scheme, to the progressive rate of taxation in the most dramatic way.
Therefore, one is not only reducing incentive, which is already desperately lacking in the economy, but one is also frustrating the growth of the sort of savings, outside the pension sphere as well as inside, which we want to provide for the future. The right hon. Gentleman's predecessor beat us with rods; he will beat up with serpents. He cannot expect the Conservative Party to support him in that.
There has been much talk about the contributory and the insurance principles. The contributory principle has a value primarily for the psychological reasons.


The right hon. Gentleman is right to maintain that. When we use the phrase "the insurance principle" in a national insurance sphere we are using it in a very special way. Private and occupational pensions are true savings, true increases in national wealth. This scheme, like the current scheme is "pay-as-you-go". It has no element of true savings in it, as the hon. Member for Westhoughton said. This scheme is redistributative taxation, as my right hon. Friend the Member for Kingston-upon-Thames brought out very clearly.
It is the redistributative taxation primarily between generations and, secondly, between income groups. As far as there is a surplus as a result of this operation, it is an excess of taxation. Again, I quote from the White Paper:
The … surplus in the scheme's early years will have a restraining effect on the pressure of demand, and thereby enable any given level of public expenditure to be financed with a somewhat smaller recourse to general taxation.
The House has to decide whether it is right to use a contributory scheme as a budgetary device, because this is what this proposition involves. We believe that it is not right. What is more, we believe that nothing would do more harm to weaken belief in the scheme's "soundness", to quote the right hon. Gentleman, than this sort of tactic. If we have a "pay-as-you-go" scheme it should be a "pay-as-you-go" scheme and should not be used as a budgetary device.
I very much regret that I was not here to hear all of the speech of the right hon. Member for Sowerby (Mr. Houghton), because he always contributes a great deal, with his experience of this subject. I must say that I found I could not agree with the part I heard. He was envisaging the build-up of a very large surplus over the years. First, I do not believe that this is feasible. I do not believe that any Minister would succeed in holding it and, secondly, that it is a right principle. We must keep our principles clear. If we have a "pay-as-you-go" scheme then the right way of treating it is "pay-as-you-go" and not building up over the years large accumulations of funds.
I come to the financing of the scheme. As the House has been frequently reminded, at the end of the White Paper there are figures which suggest that no

less than £3,400 million will be built up in the scheme by 1987–88, but on the basis of no contracting out. The point I want to make is that even the right hon. Gentleman wants to have some contracting out—we do not know how much, he does not know and he does not apparently even regard it as of the very highest importance.
The more contracting out, the less the surpluses that will be built up, so that from the beginning of the scheme there will be a conflict in the desire to build up surpluses and the desire, such as it is, and it seems to be a weakling child, to arrange for generous contracting out. The right hon. Gentleman must surely realise that the more contracting out, the less the surplus in the scheme in the early years.
To come to the House with a scheme the financial background of which is missing—and the key factor of contracting out is missing—is an astonishing performance for even as reckless a Government in financial matters as this one. I am not surprised that my right hon. Friend the Member for Kingston-upon-Thames spoke of an air of unreality. The right hon. Gentleman must forgive the House if a great part of it, and certainly my hon. Friends, are suspicious of his motives towards occupational pensions. They remember a phrase he used in 1962, when he said:
Labour's scheme would be one which will be very expensive to contract out of.
If this is added to the budgetary reasons which he will find to keep contracting out difficult, can he blame us if we refuse to follow him into the Lobby to sign a blank cheque? He cannot expect us to take him on trust in this matter.
The scheme is very different from the promises made by the right hon. Gentleman's party in the past. In "New Frontiers for Social Security" in 1963, a man with average earnings would get half pay on retirement in seven years. In this scheme he gets 42 per cent. after 20 years. The reason is very simple, as the hon. Member for The Hartlepools (Mr. Leadbitter) must appreciate, that we cannot afford higher pensions at this time. The Government have reduced our capacity to pay now and in the future by bad management of the economy and by mounting debt, yet this scheme assumes an increase in national wealth


sufficient to pay out of that increase better pensions over 20 years.
If we are to get the increase, we need, above all, more savings. More occupational pensions, more private pensions, are needed to provide those savings. The State sector does not provide savings; the private sector does. So it is necessary to have an increase in private provision even for the State scheme to fulfil its promises.
Several hon. Members have mentioned the attendance allowance for the severely disabled, and this is one of the very few immediate advances proposed in the White Paper. As the right hon. Member for Lanarkshire, North said, no one should over-estimate the extent of the change. It is an advance that a disabled wife should be able to draw on the benefit of her husband's insurance, but there still remain outside the scheme many who are disabled from birth, or who have a deficient contributions record. Such people are not provided for in the scheme unless they are included in the small section that refers to supplementary benefits.
May I now turn to that part of the White Paper to which little reference has been made, the section called "The new deal for women". It has been called the women's charter by the right hon. Gentleman. I cannot say that it has been greeted with rapturous applause by the House or even by his hon. Friends. He said in his introductory remarks that he would not go into the details of it. The fact is that there is very little to say about it. I cannot help feeling that the phrase about a new deal for women dates from the earlier or Utopian years of the Government's policy making. It is a leftover from the period of the income guarantee, their hundred dynamic days, and the rest of it.
The improvements for women are very small, and the disadvantages for them are relatively great. If I may echo what my noble Friend said, I, too, greatly welcome the provision for widows. It has been done in the right way and should be supported. There is a very small improvement to which the right hon. Member for Sowerby referred for divorced women. However, it is quite different from the sort of improvement talked about when he was presiding over the social services.
The real change for women is the abolition of the married woman's right to opt

out of the flat-rate part of the scheme This is the big change. As my hon. Friend said, of every four married women in employment at present, three choose to opt out. They can opt out or opt in at the moment. Why does the right hon. Gentleman wish to take away that choice? We are not seeking to prevent married women insuring themselves in their own right. What we are critical about is taking away from them the choice to decide for themselves whether their situations or modes of employment are such as to make it suitable for them to opt in or out. The Secretary of State made no attempt to explain why it was necessary, yet again, to choose to close an option which exists at present.
The right hon. Gentleman asks us to approve this scheme as a basis for legislation. Our answer is clear and unequivocal, and I think that it has been well expressed by my right hon. and hon. Friends. We have not yet the facts on which to base such a decision. It is extraordinary that, after four years in office and a greater period of promises, these key facts should still be missing. The White Paper does not provide the guarantees which we seek, first, for a continuing increase in private provision and, therefore, in savings, and, secondly, for an increase in incentives.
If the right hon. Gentleman insists on pressing his Motion, we shall vote against it. But even at this stage, after all these years, we say to him that he should withdraw his Motion and try again.

9.29 p.m.

The Minister of State, Department of Health and Social Security (Mr. David Ennals): This has been a debate on an issue of tremendous importance. Not only Parliament but the country has to decide to what extent we should accept a responsibility not only for the aged of today and those who are infirm, but for the future of our own generation when we retire.
We have listened to some very powerful speeches, especially from my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) and from my right hon. Friend the Member for Sowerby (Mr. Houghton). I am sorry that I did not hear all of his speech, though I wish that I could say that the general standard


of debate matched the dimension of the problem which we face.
I start by considering briefly the positions of the two Opposition parties on the issues so challengingly presented by my right hon. Friend. I start with the Liberal benches. Frankly, I could hardly believe my eyes when I saw the Amendment on the Order Paper tabled by the hon. Member for Cornwall, North (Mr. Pardoe) and his hon. Friends. I am certain that David Lloyd-George and William Beveridge would turn in their graves if they could see the text and the concept put forward in that Amendment. For the Liberals there was no equivocation such as we have had from the Tory benches. There was no question of "declines; at this stage". They reject the plan out of hand on the extraordinary argument
… that it seeks to extend the rôle of Government into a sphere where it is neither helpful nor necessary.
On the contrary, it is essential that we should prepare now for this bold step forward to provide a system of social security which our people need and deserve.
Let there be no doubt about it. This Government have made great advances in raising the levels of pensions and benefits and in providing, by the Supplementary Benefits Commission, a system of meeting human need which is humane. I am glad that many hon. Members have paid tribute to the contribution made by my right hon. Friend the Member for Lanarkshire, North when she was Minister of Social Security.
Nevertheless, the present system has failed—and this was recognised by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter)—to fulfil Beveridge's great objective—adequate pensions and other benefits by right of contribution. The flat-rate system, even with the modest graduated system which was added by the right hon. Member for Kingston-upon-Thames, is no longer adequate. Every year that goes by proves this to be true.
In the absence of a wage-related scheme such as we now propose, there are only two real alternatives: first, to continue to push up flat-rate pensions with an intolerably large contributory

burden on the low earner, or, secondly, to rely increasingly on a massive dependence on supplementary benefit.
We have already been reminded that there are 2 million National Insurance pensioners who are dependent in some degree on supplementary benefit. I believe that the Supplementary Benefits Commission does a magnificent job. Apart from paying tribute to my right hon. Friend, I pay tribute to those in the field who are administering the supplementary benefits with great discretion and humanity. The Commission has lifted the burden of misery and hardship from millions, and I am proud that we have made our contribution to it.
But this is not basically what people want. I believe that they want a fair pension, which they have earned by their own efforts and their own contributions. All right, say right hon. and hon. Gentlemen opposite. This widespread desire should be achieved through private and occupational pension schemes.
Let me make it clear beyond question that occupational schemes are fulfilling, and I believe will continue to fulfil, a very important social purpose. There has been an impressive growth in the membership of occupational pension schemes. The membership was 8 million in 1956, 11 million in 1963, and it had gone up to 12 million in 1967. They provide a degree of additional security for their members, and, as the hon. Member for Chelsea (Mr. Worsley) said, a very valued source of savings. That is why we speak of a partnership between the State and occupational pension schemes. We believe in partnership, and we must, and intend to, achieve it.
But it would be quite unrealistic to suggest that occupational pension schemes can of themselves take over the State's responsibilities. It is clearly recognised by the Life Offices' Association in the recent booklet "Progress by Partnership", from which I think that many hon. Members might learn something.
Let us look briefly at the facts. As has been said, there are about 12 million members of occupational pension schemes. About 50 per cent. of manual workers and 75 per cent. of women workers are not members of such schemes.
There is also the problem of the small employer. There are 1 million employers, and 65,000 active schemes. This is no criticism of the pension funds themselves. The industry fully recognises that casual workers and small employers have no immediate prospect of forming occupational schemes. It is estimated that, even on the present rate of expansion, by the turn of the century about one-third of the workers in this country will be without membership of an occupational scheme.
Moreover—and I believe that this is of great importance, but it is not recognised by some hon. Gentlemen opposite who have spoken today—two-thirds of occupational pensions at present being paid to men will die with those men, with no permanent widowhood cover. This is an essential weakness which we have to fill by means of our earnings-related system, and we have to recognise, too, that few occupational pension schemes guarantee that the value of their benefits will not be eroded by inflation.
Right hon. Gentleman opposite seem to have ignored the fact that our proposals have been very favourably received by spokesmen of pension funds. It was not recognised in anything that was said from the benches opposite during the debate today. At their Press conference on the White Paper, the Life Offices' Association and Associated Scottish Life Offices said:
The White Paper has steered a pretty good path through the jungle. The level of benefits seems reasonable and leaves scope for expansion in occupational schemes.
A spokesman for the N.A.P.F. State Pensions Committee said at a Press conference that the Committee was in broad agreement with the main objectives of the White Paper. The Committee welcomed in particular the move away from means tested benefits which constitute
a disincentive to lower-paid employees to save or to join occupatinal pension schemes.
Sir William Watson, the Chairman of the Standard Life Assurance Company, at the company's annual conference on Tuesday of this week welcomed the Government's acceptance of the principle that the provision of adequate pensions for all is a task to be shared by the State and the private sector in partnership. He said he was confident that the discussions which had already started would
lead to terms which will ensure a continuation of a substantial share of pension provision in the private sector.

He added that the White Paper was
a serious and responsible attempt to secure adequate pensions for everyone.
I know that right hon. Gentlemen opposite are tremendous experts, or they think they are, but none of them has reflected on the responsible judgments of those involved in the field.

Lord Balniel: I am not an actuary, so I cannot work out the scheme in detail, but the publication "Planned Savings—A Commentary on Unit Trusts, Life Assurance and Savings" said
The Government Actuary has made some estimates of the effect of contracting out. If this is done on the same scale as at present, the scheme will run at a loss from its second year.
Is that correct?

Mr. Ennals: Of course it is not correct. Planned Savings is not a representative body of pension associations. The noble Lord has done a great deal of reading. During his speech he quoted ad lib from the Tory Press, as if somehow or other he had not already briefed it himself on the attitude it was to take.
The noble Lord referred to pious hopes and election gimmicks, and this was picked up by the right hon. Member for Kingston-upon-Thames. The right hon. Gentleman warned the leaders of pension funds to use a long spoon in the negotiations. Maybe this was very clever, but I believe that it was a very irresponsible approach to be taken by the right hon. Gentleman. A moment before that he had been boldly counting his chickens before they were hatched, and assuming that he would be on these benches in 1972. If he thinks that he will be here, then it is in his interests, in the interests of what he thinks would be his Government and in the interests of the country and the pensioners that the negotiations which have now started between my right hon. Friend and the representatives of the pension companies should achieve success.
The Conservative Party has put itself in an absurd position with its Amendment, which it thinks that we have obliged it to table. The Opposition keep complaining that the contracting-out arrangements have not been fully resolved, that everything has not been signed and sealed before my right hon. Friend came to the House. But the noble


Lord knows that if, behind his back and that of the House, we had conducted all these detailed negotiations and then said. "Here it is, signed and sealed with the insurance companies, not open to further consideration by the House," they would have criticised us for going behind their backs. Their Amendment is designed to conceal with a smoke screen their own complacency and inadequacy. They have put themselves in an absurd position.
The noble Lord said that it is the rôle of the State to provide a firm guarantee of security for old age. Right. He has recognised that the present system does not do so. Right. He has agreed that, on retirement, people should be protected against a sudden drop in their living standards. Right. Further, he has agreed that pensions should be linked to earnings. If all that is Conservative policy, how do they propose that such a scheme should be financed?
It is perfectly true that we have, throughout the hours of this debate, heard critical comments on my right hon. Friend's scheme, but there has not been one positive proposal from that side of the House. We have not had a glimmer of their own thinking except a suggestion from the right hon. Member for Kingston-upon-Thames that we should now set up another committee to study this question. Let me assure the right hon. Gentleman and his right hon. Friends that this document is not just a product of a great deal of thought and negotiation by political leaders. This has been produced by the Government within the Civil Service with a tremendous amount of detail. It is not just a rough outline: it is a detailed scheme.
The point of the noble Lord and several of his hon. Friends was that, somehow or other, the contributory system is a system of taxation. This is just not so. There is a sharp difference between a tax-financed and a contributory pension scheme. Benefit in the former do not depend in any way on what people have paid in, whereas benefits in the latter are directly related to contributions paid. The more one pays, the more one gets.
It is wrong to claim that workers' contributions to the new scheme are no different from taxation. They will represent

a genuine provision for retirement, since each earnings-related contribution will build up the right of the worker to his own personal earnings-related scheme—[Interruption.] When the noble Lord has asked me questions, he might have the courtesy to listen to my answers. The noble Lord made another statement. [Interruption.] He said that—[Interruption.]

Mr. Speaker: Order. We have had a peaceful debate so far.

Mr. Ennals: The noble Lord said that contributors would have no contractual rights to pensions. This is also untrue. Under the "pay-as-you-go" system, current contributions go to finance current benefits, but each contributor will, at the same time, be building up rights to his or her personal pension related to the amount of earnings on which he or she pays contributions.
These pension rights will not just be a matter of a record in a computer. They will be written into the law of the land and the money to meet them will be available from the earnings-related contributions paid by the working population at the time. The State has a contract with its citizens under which the working population has an obligation to existing pensioners in the full expectation that future generations of contributors will in turn finance their pensions when they retire.
Many other points have been raised in the debate. One concerned the redistributive effects of the scheme and it was suggested that, somehow or other, this element had been slipped in unnoticed by my right hon. Friend. It is, in fact, a vital part of the scheme. The main redistributive effect of the new scheme at any given time is the redistribution between generations; the contributions of the working population going to pay the pensions of the retired population.
Over the years, as more and more people qualify for benefit, the new scheme will increase the average income of pensioners in relation to that of the rest of the population. Allowing for income from other sources, the scheme is expected to bring the average income of pensioners up to about four-fifths of that of the working population, compared with two-thirds at present. This could mean that the pensioners' share of the


nation's consumption will increase to about 12 per cent. at the turn of the century, compared with about 10 per cent. now, with a corresponding reduction in the share available to the rest of the population.
The other aspect of redistribution is the redistribution between low and high earners. Our 60 per cent.-25 per cent. banding system seems to us to be a fair basis on which to ensure that those who are poor, small earners get a reasonably substantial pension, in part paid for by those who are higher earners. If there is dispute about whether this 60–25 proportion is right, we are perfectly prepared to consider the matter.
My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) regretted that there was a 20-year maturing period. He seemed to give the impression that one had to wait 20 years before one received benefit. In fact, one need not wait for more than one year, because after the very first year one will get part of the earnings-related benefit; although it will take 20 years to receive full benefit. [HON. MEMBERS: "Ah!"] Naturally this must be the case. How can one get benefit unless one pays for it? The idea that the retired population can receive benefit in this way without paying for it shows how little hon. Gentlemen opposite understand the situation.
Rererence was made to the age at which women should receive retirement pension. I have received letters, as a constituency hon. Member, from a number of people who seem to think that the Government have decided that they will not get their pensions until they are 65. This is not so, and if one reads the White Paper one sees that the issue is weighed up carefully, with the conclusion that the position should remain as it is.
My right hon. Friend rightly said that the scheme is being put forward on the basis of consultation. If there are other views, we are very prepared to take them into consideration. My right hon. Friend the Member for Lanarkshire, North and others have expressed some concern that the review which will be conducted by law every two years guarantees only against rises in prices. I can well understand the feeling that it would be an attractive proposition by law to say that not only should there be protection

against rising costs but that it should be written in as a guarantee that rising earnings would also be part of the revaluation. That would be attractive, but for a Government to give that as a guarantee by law would mean they were committing themselves to something very dangerous. I believe that any Government would weigh up these decisions at the time they were taken, but they must also take into consideration the economic circumstances of the day.
A point was made by the right hon. Member for Kingston-upon-Thames concerning half-pay on retirement. This point was also made by the hon. Member for Chelsea. He suggested that under our scheme the great majority of workers will not get half pay. If the scheme had matured at April, 1968, levels, every single man earning up to about £15 a week would get half pay. When the wives' flat-rate pension of £2 16s. is included, this would rise to about £27 a week. These figures, of course, relate to gross earnings. A given pension is a greater percentage of the take-home pay.

Mr. Boyd-Carpenter: That, of course, applies to those who throughout life have been only just up to over half average earnings and who today are under 43.

Mr. Ennals: That is so, but I reiterate some of the principal advantages of the new scheme for the people of Britain. First, retirement pensions will be at a substantially higher level than they are now or have ever been. For example, if we had had the present scheme since 1948, instead of the present scheme at current prices, an employee would receive a pension today of £9 7s. from the State compared with £4 10s. and a married couple would receive, not £7 6s., but £123s.
Next, there is a new deal for women and especially benefits for widows. I am glad that there has been a welcome from the Opposition for some of the improvements in the conditions for women, because there is no doubt that the element in our society who perhaps face the greatest poverty today are widows. All widows' benefits, the widowed mother's allowance, the widow's pension if she is under 60 and retirement pensions over 60, will become earnings-related. For those over 60 they will be related to the


husband s average earnings with credits given for the years since his death on the pension if he died before that. Widows will get a pension on their own or on their husband's record, whichever is the more favourable.
The noble Lord expressed considerable concern for the sick and disabled. This is an area in which all sections of the House feel that much more needs to be done. There of course will be earnings-related short-term sickness benefit, but in addition there will be a long-term sickness benefit. For those unable to return to work this will continue as a form of invalidity pension. We are especially conscious that many of those who have been ill or disabled for some time are very severely handicapped. Some would much prefer to live at home than to be in a hospital or institution, but we have to recognise that if they are at home there is often a considerable burden on those who have to look after them. For this reason we have decided to introduce the constant attendance allowance for those very severely disabled.
The next advantage of our scheme is that pensions and benefits will be inflation-proof. The Government will be bound by law to review the main rates of pensions and other payments every two years. The resulting benefit increases will, at a minimum, compensate for any rises in prices during the preceding two years. The Government will also bear in mind the rising standard of life in the country. These reviews will also cover present scheme pensioners as well as new scheme pensioners. Allowances for war pensioners will be increased and the supplementary benefit level will be dealt with at the same time.

Miss Herbison: Is it not the case that contributions will rise with earnings? Why should a Labour Government have to say that it would be dangerous to give a pledge that the old people would

not have the gap widened between them and workers?

Mr. Ennals: As far as the Labour Government are concerned we already have the record of what has been done since we came to power, as my right hon. Friend well knows. I have the figures here. The standard rate of pension for a single person has been increased by 33⅓ per cent. since 1964, for a married couple it is 33·9 per cent., and the average earnings increase since 1964 is 27 per cent. We have stood by our pledge.
For the 7 million existing National Insurance pensioners, I can announce on behalf of the Government that there will be a further increase this autumn, the third since we came to power. Legislation will be introduced later this session.
In conclusion, it will be a proud moment for the Labour Party when this new, bold reform becomes the law of the land. This will be a practical expression of the social conscience which has always motivated our Labour movement. For us it will be a day for which we have strived and worked for long years. Alongside the National Health Service which was created by Aneurin Bevan, this new pension scheme, when it is on the Statute Book, will be a tribute to Labour Government, but, more important, it will not merely be a great day for our party; it will be a great day for the people of this country.

Mr. Charles Grey (Treasurer of Her Majesty's Household): Mr. Charles Grey (Treasurer of Her Majesty's Household) rose in his place and claimed to move. That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the Amendment be made:—

The House divided: Ayes 232, Noes 289.

Division No. 111.]
AYES
[10.0 p.m.


Alison, Michael (Barkston Ash)
Beamish, Col. Sir Tufton
Blaker, Peter


Astor, John
Bennett, Sir Frederic (Torquay)
Boardman, Tom (Leicester, S.W.)


Atkins, Humphrey (M't'n &amp; M'd'n)
Bennett, Dr. Reginald (Gos. &amp; Fhm)
Body, Richard


Awdry, Daniel
Berry, Hn. Anthony
Bossom, Sir Clive


Baker, Kenneth (Acton)
Bessell, Peter
Boyd-Carpenter, Rt. Hn. John


Baker, W. H. K. (Banff)
Biffen, John
Boyle, Rt. Hn. Sir Edward


Balniel, Lord
Biggs-Davison, John
Braine, Bernard


Barber, Rt. Hn. Anthony
Birch, Rt. Hn. Nigel
Brewis, John


Batsford, Brian
Black, Sir Cyril
Brinton, Sir Tatton




Bromley-Davenport, Lt. Col. Sir Walter
Hogg, Rt. Hn. Quintin
Pardoe, John


Brown, Sir Edward (Bath)
Holland, Philip
Pearson, Sir Frank (Glitheroe)


Bruce-Gardyne, J.
Hordern, Peter
Peel, John


Bryan, Paul
Hornby, Richard
Percival, Ian


Buchanan-Smith, Alick (Angus, N &amp; M)
Howell, David (Guildford)
Peyton, John


Buck, Anthony (Colchester)
Hunt, John
Pink, R. Bonner


Bullus, Sir Eric
Hutchison, Michael Clark
Pounder, Rafton


Burden, F, A.
Iremonger, T. L.
Powell, Rt, Hn. J. Enoch


Campbell, B. (Oldham, W.)
Irvine, Bryant Godman (Rye)
Price, David (Eastleigh)


Campbell, Gordon (Moray &amp; Nairn)
Jenkin, Patrick (Woodford)
Prior, J. M. L.


Carr, Rt. Hn. Robert
Jennings, J. C. (Burton)
Pym, Francis


Channon, H. P. G.
Johnston, Russell (Inverness)
Quennell, Miss J. M.


Chichester-Clark, R.
Jones, Arthur (Northants, S.)
Ramsden, Rt. Hn. James


Clark, Henry
Jopling, Michael
Rawlinson, Rt. Hn. Sir Peter


Clegg, Walter
Joseph, Rt. Hn. Sir Keith
Rees-Davies, W. R.


Cooke, Robert
Kaberry, Sir Donald
Renton, Rt. Hn. Sir David


Cooper-Key, Sir Neill
Kerby, Capt. Henry
Rhys Williams, Sir Brandon


Corfield, F. V.
Kershaw, Anthony
Ridley, Hn. Nicholas


Costain, A, P.
Kimball, Marcus
Ridsdale, Julian


Crouch, David
King, Evelyn (Dorset, S.)
Rippon, Rt. Hn. Geoffrey


Crowder, F. P.
Kitson, Timothy
Robson Brown, Sir William


Cunningham, Sir Knox
Knight, Mrs. Jill
Rodgers, Sir John (Sevenoaks)


Currie, G. B. H.
Lancaster, Col. C. G.
Royle, Anthony


Dalkeith, Earl of
Lane, David
Russell, Sir Ronald


Dance, James
Langford-Holt, Sir John
St. John-Stevas, Norman


d'Avigdor-Goldsmid, Sir Henry
Legge-Bourke, Sir Harry
Sandys, Rt. Hn. D.


Dean, Paul
Lewis, Kenneth (Rutland)
Scott, Nicholas


Deedes, Rt. Hn. W. F. (Ashford)
Lloyd, Ian (P'tsm'th, Langstone)
Scott-Hopkins, James


Digby, Simon Wingfield
Lloyd, Rt. Hn. Selwyn (Wirral)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Dodds-Parker, Douglas
Longden, Gilbert
Silvester, Frederick


Doughty, Charles
Loveys, W. H.
Sinclair, Sir George


du Cann, Rt. Hn. Edward
Lubbock, Eric



Eden, Sir John
McAdden, Sir Stephen
Smith, Dudley (W'wick &amp; L'mington)


Elliot, Capt. Walter (Carshalton)
MacArthur, Ian
Smith, John (London &amp; W'minster)


Emery, Peter
Maclean, Sir Fitzroy
Speed, Keith


Eyre, Reginald
Macleod, Rt. Hn. Iain
Stainton, Keith


Farr, John
McMaster, Stanley
Stoddart-Scott, Col. Sir M.


Fisher, Nigel
Macmillan, Maurice (Farnham)
Summers, Sir Spencer


Fortescue, Tim
McNair-Wilson. Patrick
Tapsell, Peter


Foster, Sir John
Maddan, Martin
Taylor, Sir Charles (Eastbourne)


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Marples, Rt. Hn. Ernest
Taylor, Edward M. (G'gow, Cathcart


Galbraith, Hn. T. G.
Marten, Neil
Taylor, Frank (Moss Side)


Gibson-Watt, David
Maude, Angus
Thorpe, Rt. Hn. Jeremy


Gilmour, Ian (Norfolk, C.)
Maudling, Rt. Hn. Reginald
Tilney, John


Gilmour, Sir John (Fife, E.)
Mawby, Ray
Turton, Rt. Hn. R. H.


Glover, Sir Douglas
Maxwell-Hyslop, R. J.
van Straubenzee, W. R.


Glyn, Sir Richard
Maydon, Lt.-Cmdr. S. L. C.
Vaughan-Morgan, Rt. Hn. Sir John


Godber, Rt. Hn. J. B.
Mills, Peter (Torrington)
Vickers, Dame Joan


Goodhart, Philip
Mills, Stratton (Belfast, N.)
Waddington, David


Goodhew, Victor
Miscampbell, Norman
Walker-Smith, Rt. Hn. Sir Derek


Gower, Raymond
Mitchell, David (Basingstoke)
Walters, Dennis


Grant, Anthony
Monro, Hector
Ward, Dame Irene


Grant-Ferris, R.




Gresham Cocke, R.
Montgomery, Fergus
Weatherill, Bernard


Grieve, Percy
Morgan, Geraint (Denbigh)
Wells, John (Maidstone)


Gurden, Harold
Morrison, Charles (Devizes)
Whitelaw, Rt. Hn. William


Hall, John (Wycombe)
Mott-Radclyffe, Sir Charles
Williams, Donald (Dudley)


Hall-Davis, A. G. F.
Munro-Lucas-Tooth, Sir Hugh
Wilson, Geoffrey (Truro)


Hamilton, Lord (Fermanagh)
Murton, Oscar
Winstanley, Dr. M. P.


Hamilton, Michael (Salisbury)
Nabarro, Sir Gerald
Wolrige-Gordon, Patrick


Harris, Frederic (Croydon, N.W.)
Nicholls, Sir Harmar
Wood, Rt. Hn. Richard


Harris, Reader (Heston)
Noble, Rt. Hn. Michael
Woodnutt, Mark


Harvey, Sir Arthur Vere
Nott, John
Worsley, Marcus


Hastings, Stephen
Onslow, Cranley
Wright, Esmond


Hawkins, Paul
Orr, Capt. L. P. S.
Wylie, N. R.


Hay, John
Orr-Ewing, Sir Ian
Younger, Hn, George


Heald, Rt. Hn. Sir Lionel
Osborn, John (Hallam,)



Heseltine, Michael
Osborne, Sir Cyril (Louth)
TELLERS FOR THE AYES:


Higgins, Terence L.
Page, Graham (Crosby)
Mr. R. W. Elliott and


Hill, J. E. B.
Page, John (Harrow, W.)
Mr. Jasper More.


Hirst, Geoffrey






NOES


Albu, Austen
Beaney, Alan
Bray, Dr. Jeremy


Alldritt, Walter
Bidwell, Sydney
Brooks, Edwin


Anderson, Donald
Binns, John
Broughton, Dr. A. D. D.


Archer, Peter
Bishop, E. S.
Brown, Rt. Hn. George (Belper)


Ashton, Joe (Bassetlaw)
Blackburn, F.
Brown, Hugh D. (G'gow, Provan)


Atkins, Ronald (Preston, N.)
Blenkinsop, Arthur
Brown, Bob (N 'c'tle-upon-Tyne, W.)


Atkinson, Norman (Tottenham)
Boardman, H. (Leigh)
Brown, R. W. (Shoreditch &amp; F'bury)


Bacon, Rt. Hn. Alice
Booth, Albert
Buchan, Norman


Bagier, Gordon A. T.
Boston, Terence
Buchanan, Richard (G'gow, Sp'burn)


Barnes, Michael
Bottomley, Rt. Hn. Arthur
Butler, Herbert (Hackney, C.)


Barnett, Joel
Boyden, James
Butler, Mrs. Joyce (Wood Green)




Callaghan, Rt. Hn. James
Hooley, Frank
Moyle, Roland


Carmichael, Neil
Horner, John
Mulley, Rt. Hn. Frederick


Carter-Jones, Lewis
Houghton, Rt. Hn. Douglas
Murray, Albert


Castle, Rt. Hn. Barbara
Howarth, Harry (Wellingborough)
Neal, Harold


Chapman, Donald
Howarth, Robert (Bolton, E.)
Newens, Stan


Coe, Denis
Howell, Denis (Small Heath)
Noel-Baker, Rt. Hn. Philip (Derby, S.)


Coleman, Donald
Howie, W.
Oakes, Gordon


Conlan, Bernard
Hoy, James
Ogden, Eric


Corbet, Mrs. Freda
Huckfield, Leslie
O'Malley, Brian


Crawshaw, Richard
Hughes, Rt. Hn. Gledwyn (Anglesey)
Oram, Albert E.


Cronin, John
Hughes, Emrys (Ayrshire, S.)
Orbach, Maurice


Crossman, Rt. Hn. Richard
Hughes, Hector (Aberdeen, N.)
Orme, Stanley


Cullen, Mrs. Alice
Hughes, Roy (Newport)
Oswald, Thomas


Dalyell, Tam
Hunter, Adam
Owen, Dr. David (Plymouth, S'tn)


Darling, Rt. Hn. George
Hynd, John
Owen, Will (Morpeth)


Davidson, Arthur (Accrington)
Irvine, Sir Arthur (Edge Hill)
Pauley, Walter


Davies, Ednyfed Hudson (Conway)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Palmer, Arthur


Davies, G. Elfed (Rhondda, E.)
Jay, Rt. Hn. Douglas
Pannell, Rt. Hn. Arthur


Davies, Dr. Ernest (Stretford)
Jeger, George (Goole)
Park, Trevor


Davies, Rt. Hn. Harold (Leek)
Jeger, Mrs. Lena (H'b'n &amp; St. P'cras, S.)
Parker, John (Dagenham)


Davies, Ifor (Gower)
Jenkins, Hugh (Putney)
Parkin, Ben (Paddington, N.)


de Freitas, Rt. Hn. Sir Geoffrey
Johnson, Carol (Lewisham, S.)
Parkyn, Brian (Bedford)


Delargy, Hugh
Johnson, James (K'ston-on-Hull, W.)
Pavitt, Laurence


Dell, Edmund
Jones, Dan (Burnley)
Pearson, Arthur (Pontypridd)


Dempsey, James
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Peart, Rt. Hn. Fred


Dewar, Donald
Jones, T. Alec (Rhondda, West)
Pentland, Norman


Diamond, Rt. Hn. John
Judd, Frank
Perry, Ernest G. (Battersea, S.)


Dickens, James
Kelley, Richard
Prentice, Rt. Hn. R. E.


Dobson, Ray
Kenyon, Clifford
Price, Christopher (Perry Barr)


Doig, Peter
Kerr, Mrs. Anne (R'ter &amp; Chatham)
Price, Thomas (Westhoughton)


Driberg, Tom
Kerr, Dr. David (W'worth, Central)
Price, William (Rughy)


Dunn, James A.
Kerr, Russell (Feltham)
Pursey, Cmdr. Harry


Dunnett, Jack
Lawson, George
Randall, Harry


Dunwoody, Mrs. Gwyneth (Exeter)
Leadbitter, Ted
Rankin, John


Dunwoody, Dr. John (F'th &amp; C'b'e)
Ledger, Ron
Rees, Merlyn


Eadie, Alex
Lee, Rt. Hn. Frederick (Newton)
Reynolds, Rt. Hn. G. W.


Edelman, Maurice
Lee, Rt. Hn. Jennie (Cannock)
Richard, Ivor


Edwards, Robert (Bilston)
Lee, John (Reading)
Roberts, Albert (Normanton)


Ellis, John
Lestor, Miss Joan
Roberts, Rt. Hn. Goronwy


English, Michael
Lever, Harold (Cheetham)
Roberts, Gwilym (Bedfordshire, S.)


Enals, David
Lever, L. M. (Ardwick)
Robertson, John (Paislye)


Evans, Fred (Caerphilly)
Lewis, Arthur (W. Ham, N.)
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Faulds, Andrew
Lewis, Ron (Carlisle)
Roebuck, Roy


Fernyhough, E.
Lipton, Marcus
Rogers, George (Kensington, N.)


Finch, Harold
Luard, Evan
Rose, Paul


Fitch, Alan (Wigan)
Lyon, Alexander W. (York)
Ross, Rt. Hn. William


Fletcher, Rt. Hn. Sir Eric (Islington, E.)
Lyons, Edward (Bradford, E.)
Rowlands, E.


Fletcher, Raymond (Ilkeston)
Mabon, Dr. J. Dickson
Ryan, John


Fletcher, Ted (Darlington)
McBride, Neil
Shaw, Arnold (llford, S.)


Foley, Maurice
McCann, John
Sheldon, Robert


Foot, Rt. Hn. Sir Dingle (Ipswich)
MacColl, James
Shinwell, Rt. Hn. E.


Foot, Michael (Ebbw Vale)
MacDermot, Niall
Shore, Rt. Hn. Peter (Stepney)


Ford, Ben
Macdonald, A. H.
Short, Mrs. Renée (W'hampton, N.E.)


Fowler, Gerry
McKay, Mrs. Margaret
Silkin, Rt. Hn. John (Deptford)


Fraser, John (Norwood)
Mackenzie, Gregor (Rutherglen)
Silkin, Hn. S. C. (Dulwich)


Freeson, Reginald
Mackie, John
Silverman, Julius


Galpern, Sir Myer
Mackintosh, John P.
Skeffington, Arthur


Gardner, Tony
Maclennan, Robert
Small, William


Garrett, W. E.
MacMillan, Malcolm (Wetern Isles)
Spriggs, Leslie


Ginsburg, David
McMillan, Tom (Glasgow, C.)
Steele, Thomas (Dunbartonshire, W.)


Gordon Walker, Rt. Hn. P. C.
McNamara, J. Kevin
Stewart, Rt. Hn. Michael


Gray, Dr. Hugh (Yarmouth)
MacPherson, Malcolm
Stonehouse, Rt. Hn. John


Gregory, Arnold
Mahon, Peter (Preston, S.)
Strauss, Rt. Hn. G. R.


Grey, Charles (Durham)
Mahon, Simon (Bootle)
Summerskill, Hn. Dr. Shirley


Griffiths, David (Rother Valley)
Mallalieu, J.P.W. (Huddersfield, E.)
Taverne, Dick


Griffiths, Eddie (Brightside)
Manuel, Archie



Griffiths, Rt. Hn. James (Llanelly)
Mapp, Charles
Thomas, Rt. Hn. George


Griffiths, Will (Exchange)
Marks, Kenneth
Thomson, Rt. Hn. George


Hamilton, James (Bothwell)
Marquand, David
Thornton, Ernest


Hamilton, William (Fife, W.)
Marsh, Rt. Hn. Richard
Tinn, James


Hamling, William
Mason, Rt. Hn. Roy
Tuck, Raphael


Hannan, William
Mayhew, Christopher
Urwin, T. W.


Harper, Joseph
Mellish, Rt. Hn. Robert
Varley, Eric G.


Harrison, Walter (Wakefield)
Mendelson, John
Wainwright, Edwin (Dearne Valley)


Hart, Rt. Hn. Judith
Millan, Bruce
Wallace, George


Haseldine, Norman
Miller, Dr. M. S.
Watkins. David (Consett)


Hattersley, Roy
Mitchell, R. C. (S'th'pton, Test)
Weitzman, David


Hazell, Bert
Molloy, William
Wellbeloved, James


Healey, Rt. Hn. Denis
Moonman, Eric
Whitaker, Ben


Heffer, Eric S.
Morgan, Elystan (Cardiganshire)
Wilkins, W. A.


Henig, Stanley
Morris, Alfred (Wythenshawe)
Willey, Rt. Hn. Frederick


Herbison, Rt. Hn. Margaret
Morris, Charles R. (Openshaw)
Williams, Alan (Swansea, W.)


Hilton, W. S.
Morris, John (Aberavon)
Williams, Alan Lee (Hornchurch)







Williams, Clifford (Abertillery)
Wilson, Rt. Hn. Harold (Huyton)
TELLERS FOR THE NOES:


Williams, Mrs. Shirley (Hitchin)
Wilson, William (Coventry, S.)
Mr. Ioan L. Evans and


Williams, W. T. (Warrington)
Winnick, David
Mr. J. D. Concannon.


Willis, Rt. Hn. George
Woof, Robert

Main Question put accordingly:—

The House divided: Ayes 283, Noes 234.

Division No. 112.]
AYES
[10.12 p.m.


Albu, Austen
Ennals, David
Kerr, Mrs. Anne (R'ter &amp; Chatham)


Alldritt, Walter
Evans, Fred (Caerphilly)
Kerr, Dr. David (W'worth, Central)


Anderson, Donald
Faulds, Andrew
Kerr, Russell (Feltham)


Archer, Peter
Fernyhough, E.
Lawson, George


Ashton, Joe (Bassetlaw)
Finch, Harold
Leadbitter, Ted


Atkins, Ronald (Preston, N.)
Fitch, Alan (Wigan)
Ledger, Ron


Atkinson, Norman (Tottenham)
Fletcher, Rt. Hn. Sir Eric (Islington, E.)
Lee, Rt. Hn. Frederick (Newton)


Bacon, Rt. Hn. Alice
Fletcher, Raymond (Ilkeston)
Lee, Rt. Hn. Jennie (Cannock)


Bagier, Gordon A. T.
Fletcher, Ted (Darlington)
Lee, John (Reading)


Barnes, Michael
Foley, Maurice
Lestor, Miss Joan


Barnett, Joel
Foot, Rt. Hn. Sir Dingle (Ipswich)
Lever, Harold (Cheetham)


Bidwell, Sydney
Foot, Michael (Ebbw Vale)
Lever, L. M. (Ardwick)


Binns, John
Ford, Ben
Lewis, Arthur (W. Ham, N.)


Bishop, E. S.
Fowler, Gerry
Lewis, Ron (Carlisle)


Blackburn, F.
Fraser, John (Norwood)
Lipton, Marcus


Blenkinsop, Arthur
Freeson, Reginald
Luard, Evan


Boardman, H. (Leigh)
Galpern, Sir Myer
Lyon, Alexander W. (York)


Booth, Albert
Gardner, Tony
Lyons, Edward (Bradford, E.)


Boston, Terence
Garrett, W. E.
Mabon, Dr. J. Dickson


Bottomley, Rt. Hn. Arthur
Ginsburg, David
McBride, Neil


Boyden, James
Gordon Walker, Rt. Hn. P. C.
McCann, John


Bray, Dr. Jeremy
Gray, Dr. Hush (Yarmouth)
MacColl, James


Brooks, Edwin
Gregory, Arnold
MacDermot, Niall


Broughton, Dr. A. D. D.
Grey, Charles (Durham)
Macdonald, A. H.


Brown, Rt. Hn. George (Belper)
Griffiths, Eddie (Brightside)
McKay, Mrs. Margaret


Brown, Hugh D. (G'gow, Provan)
Griffiths, Rt. Hn. James (Llanelly)
Mackenzie, Gregor (Rutherglen)


Brown, Bob (N'ctle-upon-Tyne, W.)
Griffiths, Will (Exchange)
Mackie, John


Brown, R. W. (Shoreditch &amp; F'bury)
Hamilton, James (Bothwell)
Maclennan, Robert


Buchan, Norman
Hamilton, William (Fife, W.)
MacMillan, Malcolm (Western Isles)


Buchanan, Richard (G'gow, Sp'burn)
Hamling, William
McMillan, Tom (Glasgow, C.)


Butler, Herbert (Hackney, C.)
Hannan, William
McNamara, J. Kevin


Butler, Mrs. Joyce (Wood Green)
Harper, Joseph
MacPherson, Malcolm


Callaghan, Rt. Hn. James
Harrison, Walter (Wakefield)
Mahon, Peter (Preston, S.)


Carmichael, Neil




Carter-Jones, Lewis
Hart, Rt. Hn. Judith
Mahon, Simon (Bootle)


Castle, Rt. Hn. Barbara
Haseldine, Norman
Mallalieu, J.P.W. (Huddersfield, E.)


Chapman, Donald
Hattersley, Roy
Manuel, Archie


Coe, Denis
Hazell, Bert
Mapp, Charles


Coleman, Donald
Healey, Rt. Hn. Denis
Marks, Kenneth


Conlan, Bernard
Heffer, Eric S.
Marquand, David


Corbet, Mrs. Freda
Henig, Stanley
Marsh, Rt. Hn. Richard


Crawshaw, Richard
Herbison, Rt. Hn. Margaret
Mason, Rt. Hn. Roy


Cronin, John
Hilton, W. S.
Mayhew, Christopher


Crossman, Rt. Hn. Richard
Hooley, Frank
Mellish, Rt. Hn. Robert


Cullen, Mrs. Alice
Horner, John
Mendelson, John


Dalyell, Tam
Houghton, Rt. Hn. Douglas
Millan, Bruce


Darling, Rt. Hn, George
Howarth, Harry (Wellingborough)
Miller, Dr. M. S.


Davidson, Arthur (Accrington)
Howarth, Robert (Bolton, E.)
Mitchell, R. C. (S'th'pton, Test)


Davies, Ednyfed Hudson (Conway)
Howell, Denis (Small Heath)
Molloy, William


Davies, G. Elfed (Rhondda, E.)
Howie, W.
Moonman, Eric


Davies, Dr. Ernest (Stretford)
Hoy, James
Morgan, Elystan (Cardiganshire)


Davies, Rt. Hn. Harold (Leek)
Huckfield, Leslie
Morris, Alfred (Wythenshawe)


Davies, Ifor (Gower)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Morris, Charles R. (Openshaw)


de Freiras, Rt. Hn. Sir Geoffrey
Hughes, Emrys (Ayrshire, S.)
Morris, John (Aberavon)


Delargy, Hugh
Hughes, Hector (Aberdeen, N.)
Moyle, Roland


Dell, Edmund
Hughes, Roy (Newport)
Mulley, Rt. Hn. Frederick


Dempsey, James
Hunter, Adam
Murray, Albert


Dewar, Donald
Hynd, John
Neal, Harold


Diamond, Rt. Hn. John
Irvine, Sir Arthur (Edge Hill)
Newens, Stan




Noel-Baker, Rt. Hn. Philip (Derby, S.)


Dickens, James
Jackson, Colin (B'h'se &amp; Spenb'gh)
Oakes, Gordon


Dobson, Ray
Jay, Rt. Hn. Douglas
Ogden, Eric


Doig, Peter
Jeger, George (Goole)
O'Malley, Brian


Driberg, Tom
Jeger, Mrs. Lena (H'b'n &amp; St. P'cras, S.)
Oram, Albert E.


Dunn, James A.
Jenkins, Hugh (Putney)
Orbach, Maurice


Dunnett, Jack
Johnson, Carol (Lewisham, S.)
Orme, Stanley


Dunwoody, Mrs. Gwyneth (Exeter)
Johnson, James (K'ston-on-Hull, W.)
Oswald, Thomas


Dunwoody, Dr. John (F'th &amp; C'b'e)
Jones, Dan (Burnley)
Owen, Dr. David (Plymouth, S'tn)


Eadie, Alex
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Owen, Will (Morpeth)


Edelman, Maurice
Jones, T. Alec (Rhondda, West)
Padley, Walter


Edwards, Robert (Bilston)
Judd, Frank
Palmer, Arthur


Ellis, John
Kelley, Richard
Pannell, Rt. Hn. Charles


English, Michael
Kenyon, Clifford
Park, Trevor




Parker, John (Dagenham)
Rogers, George (Kensington, N.)
Urwin, T. W.


Parkin, Ben (Paddington, N.)
Rose, Paul
Varley, Eric G.


Parkyn, Brian (Bedford)
Ross, Rt. Hn. William
Wainwright, Edwin (Dearne Valley)


Pavitt, Laurence
Rowlands, E.
Wallace, George


Pearson, Arthur (Pontypridd)
Shaw, Arnold (llford, S.)
Watkins, David (Consett)


Peart, Rt. Hn. Fred
Sheldon, Robert
Weitzman, David


Pentland, Norman
Shore, Rt. Hn. Peter (Stepney)
Wellbeloved, James


Perry, Ernest G. (Battersea, S.)
Short, Mrs. Renée (W'hampton, N.E.)
Whitaker, Ben


Prentice, Rt. Hn. R. E.
Silkin, Rt. Hn. John (Deptford)
Wilkins, W. A.


Price, Christopher (Perry Barr)
Silkin, Hn. S. C. (Dulwich)
Willey, Rt. Hn. Frederick


Price, Thomas (Westhoughton)
Silverman, Julius
Williams, Alan (Swansea, W.)


Price, William (Rugby)
Skeffington, Arthur
Williams, Alan Lee (Hornchurch)


Pursey, Cmdr. Harry
Small, William
Williams Clifford (Abertillery)


Randall, Harry
Spriggs, Leslie
Williams, Mrs. Shirley (Hitchin)


Rankin, John
Stewart, Rt. Hn. Michael
Williams, W. T. (Warrington)


Rees, Merlyn
Stonehouse, Rt. Hn. John
Willis, Rt. Hn. George


Reynolds, Rt. Hn. G. W.
Strauss, Rt. Hn. G. R.
Wilson, Rt. Hn. Harold (Huyton)


Richard, Ivor
Summerskill, Hn. Dr. Shirley
Wilson, William (Coventry, S.)


Roberts, Albert (Normanton)
Taverne, Dick
Winnick, David


Roberts, Rt. Hn. Goromy
Thomas, Rt. Hn. George
Woof, Robert


Roberts, Gwilym (Bedfordshire, S.)
Thomson, Rt. Hn. George



Robertson, John (Paisley)
Thornton, Ernest
TELLERS FOR THE AYES:


Robinson, Rt. Hn. Kenneth (St. P'c'as)
Tinn, James
Mr. J. D. Concannon and


Roebuck, Roy
Tuck, Raphael
Mr. Ioan L. Evans.




NOES


Alison, Michael (Barkston Ash)
Doughty, Charles
Kaberry, Sir Donald


Astor, John
du Cann, Rt. Hn. Edward
Kerby, Capt. Henry


Atkins, Humphrey (M't'n &amp; M'd'n)
Eden, Sir John
Kershaw, Anthony


Awdry, Daniel
Elliot, Capt. Walter (Carshalton)
Kimball, Marcus


Baker, Kenneth (Acton)
Emery, Peter
King, Evelyn (Dorset, S.)


Baker, W. H. K. (Banff)
Eyre, Reginald
Kitson, Timothy


Balniel, Lord
Farr, John
Knight, Mrs. Jill


Barber, Rt. Hn. Anthony
Fisher, Nigel
Lambton, Viscount


Batsford, Brian
Fortescue, Tim
Lancaster, Col. C. G.


Beamish, Col. Sir Tufton
Foster, Sir John
Lane, David


Bennett, Sir Frederic (Torquay)
Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Langford-Holt, Sir John


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Galbraith, Hn. T. C.
Legge-Bourke, Sir Harry


Berry, Hn. Anthony
Gibson-Watt, David
Lewis, Kenneth (Rutland)


Bessell, Peter
Giles, Rear-Adm. Morgan
Lloyd, Ian (P'tsm'th, Langstone)


Biffen, John
Gilmour, Ian (Norfolk, C.)
Lloyd, Rt. Hn. Selwyn (Wirral)


Biggs-Davison, John
Gilmour, Sir John (Fife, E.)
Longden, Gilbert


Birch, Rt. Hn. Nigel
Glover, Sir Douglas
Loveys, W. H.


Black, Sir Cyril
Glyn, Sir Richard
Lubbock, Eric


Blaker, Peter
Godber, Rt. Hn. J. B.
McAdden, Sir Stephen


Boardman, Tom (Leicester, S.W.)
Goodhart, Philip
MacArthur, Ian


Body, Richard
Goodhew, Victor
Maclean, Sir Fitzroy


Bossom, Sir Clive
Gower, Raymond
Macleod, Rt. Hn. Iain


Boyd-Carpenter, Rt. Hn. John
Grant, Anthony
McMaster, Stanley


Boyle, Rt. Hn. Sir Edward
Grant-Ferris, R.
Macmillan, Maurice (Farnham)


Braine, Bernard
Gresham Cooke, R.
McNair-Wilson. Patrick


Brewis, John
Grieve, Percy
Maddan, Martin


Brinton, Sir Tatton
Gurden, Harold
Maginnis, John E.


Bromley-Davenport, Lt.-Col. Sir Walter
Hall, John (Wycombe)
Marples, Rt. Hn. Ernest


Brown, Sir Edward (Bath)
Hall-Davis, A. G. F.
Marten, Neil


Bruce-Gardyne, J.
Hamilton, Lord (Fermanagh)
Maude, Angus


Bryan, Paul
Hamilton, Michael (Salisbury)
Maudling, Rt. Hn. Reginald


Buchanan-Smith, Alick (Angus, N &amp; M)
Harris, Frederic (Croydon, N.W.)
Mawby, Ray


Buck, Antony (Colchester)
Harris, Reader (Heston)
Maxwell-Hyslop, R. J.


Bullus, Sir Eric
Harvey, Sir Arthur Vere
Maydon, Lt.-Cmdr. S. L. C.


Burden, F. A.
Hastings, Stephen
Mills, Peter (Torrington)


Campbell, B. (Oldham, W,)
Hawkins, Paul
Mills, Stratton (Belfast, N.)


Campbell, Gordon (Moray &amp; Nairn)
Hay, John
Miscampbell, Norman


Carr, Rt. Hn. Robert
Heald, Rt. Hn. Sir Lionel
Mitchell, David (Basingstoke)


Channon, H. P. G.
Heseltine, Michael
Monro, Hector


Chichester-Clark, R.
Higgins, Terence L.
Montgomery, Fergus


Clark, Henry
Hill, J. E. B.
Morgan, Geraint (Denbigh)


Clegg, Walter
Hirst, Geoffrey
Morrison, Charles (Devizes)


Cooke, Robert
Hogg, Rt. Hn. Quintin
Mott-Radclyffe, Sir Charles


Cooper-Key, Sir Neill
Holland, Philip
Munro-Lucas-Tooth, Sir Hugh


Corfield, F. W.
Hordern, Peter
Murton, Oscar


Costain, A. P.
Hornby, Richard
Nabarro, Sir Gerald


Crouch, David
Howell, David (Guildford)
Nicholls, Sir Harmar


Crowder, F. P.
Hunt, John
Noble, Rt. Hn. Michael


Cunningham, Sir Knox
Hutchison, Michael Clark
Nott, John


Currie, G. B. H.
Iremonger, T. L.
Onslow, Cranley


Dalkeith, Earl of
Irvine, Bryant Godman (Rye)
Orr, Capt. L. P. S.


Dance, James
Jenkin, Patrick (Woodford)
Orr-Ewing, Sir Ian


d'Avigdor-Goldsmid, Sir Henry
Jennings, J. C. (Burton)
Osborn, John (Hallam)


Dean, Paul
Johnston, Russell (Inverness)
Osborne, Sir Cyril (Louth)


Deedes, Rt. Hn. W. F. (Ashford)
Jones, Arthur (Northants, S.)
Page, Graham (Crosby)


Digby, Simon Wingfield
Jopling, Michael
Page, John (Harrow, W.)


Dodds-Parker, Douglas
Joseph, Rt. Hn. Sir Keith
Pardoe, John




Pearson, Sir Frank (Clitheroe)







Peel, John
St. John-Stevas, Norman
Vickers, Dame Joan


Percival, Ian
Sandys, Rt. Hn. D.
Waddington, David


Peyton, John
Scott, Nicholas
Walker-Smith, Rt. Hn. Sir Derek


Pink, R. Bonner
Scott-Hopkins, James
Walters, Dennis


Pounder, Rafton
Shaw, Michael (Sc'b'gh &amp; Whitby)
Ward, Dame Irene


Powell, Rt. Hn. J. Enoch
Silvester, Frederick
Weatherill, Bernard


Price, David (Eastleigh)
Sinclair, Sir George
Wells, John (Maidstone)


Prior, J. M. L.
Smith, Dudley (W'wick &amp; L'mington)
Whitelaw, Rt. Hn. William


Pym, Francis
Smith, John (London &amp; W 'minster)
Williams, Donald (Dudley)


Quennell, Miss J. M.
Speed, Keith
Wilson, Geoffrey (Truro)


Ramsden, Rt. Hn. James
Stainton, Keith
Winstanley, Dr. M. P.


Rawlinson, Rt. Hn. Sir Peter
Stoddart-Scott, Col. Sir M.
Wolrige-Gordon, Patrick


Rees-Davies, W. R.
Summers, Sir Spencer
Wood, Rt. Hn. Richard


Renton, Rt. Hn. Sir David
Tapsell, Peter
Woodnutt, Mark


Rhys Williams, Sir Brandon
Taylor, Sir Charles (Eastbourne)
Worsley, Marcus


Ridley, Hn. Nicholas
Taylor, Edward M. (G'gow, Cathcart)
Wright, Esmond


Ridsdale, Julian
Taylor, Frank (Moss Side)
Wylie, N. R.


Rippon, Rt. Hn. Geoffrey
Thorpe, Rt. Hn. Jeremy
Younger, Hn. George


Robson Brown, Sir William
Tilney, John



Rodgers, Sir John (Sevenoaks)
Turton, Rt. Hn. R. H.
TELLERS FOR THE NOES:


Royle, Anthony
van Straubenzee, W. R.
Mr. R. W. Elliott and


Russell. Sir Ronald
Vaughan-Morgan, Rt. Hn. Sir John
Mr. Jasper More.

Resolved,


That this House approves the White Paper on Proposals for Earnings-Related Social Security, Command Paper No. 3883, as a basis for legislation; and invites Her Majesty's Government to continue consultation with a view to preparing legislation.

INTERNATIONAL DEVELOPMENT ASSOCIATION

10.23 p.m.

The Minister of Overseas Development (Mr. Reg Prentice): I beg to move,
That the International Development Association (Additional Payments) Order 1969, a draft of which was laid before this House on 21st January, be approved.
The purpose of the Order is to enable Her Majesty's Government to make a payment to the International Development Association of the sterling equivalent of the sum of 51,840,000 dollars; in other words, a sum equal to the first instalment of the British share of the second replenishment of the I.D.A.
The view has often been expressed from all sides of the House that the International Development Association is one of the most valuable institutions in the whole area of development aid. As the House will be aware, it provides soft-term multilaterial aid to the poorest of the developing countries, the countries which are least able to afford the servicing of loans at conventional rates of interest. It is of great benefit to these countries in the sense that it combines interest-free terms, untied procurement, with very high standards of management and very high standards in the scrutiny of projects.
Last year, an agreement was reached to replenish the funds of I.D.A. at the level of 1,200 million dollars over a three-year period, which was a 60 per cent. increase over the level for the preceding three years. As the House will be aware, Her Majesty's Government worked very hard to secure that agreement and would have been prepared to go to a higher figure and pay the British contribution to that higher figure if agreement had been possible.
The agreement was ratified in this House in the summer, when the Overseas Aid Act, 1968, passed all its stages in both Houses. That Act authorised the payment of the sum of £64·8 million over the three-year period, that being the British contribution of the replenishment.
However, the replenishment cannot be effective until the agreement has been

ratified by at least 12 countries, making a total contribution between them of 950 million dollars. The position to date is that 11 countries have ratified, with a total contribution between them of 472 million dollars. Seven other donor countries have not yet ratified. Those seven countries include the United States.
The U.S. position is vital in this, partly because the other six countries are waiting for the U.S. to ratify, and in two cases this has been made clear by spokesmen of their Governments. But it is particularly vital because the U.S. contribution is essential to reach the minimum figure of commitment of 950 million dollars.
The outgoing U.S. Congress had an I.D.A. Bill before it which received a certain amount of discussion before the American elections. But it was not passed before the elections took place, and the Bill is now beginning to be considered by the new U.S. Congress.
Meanwhile, it became clear by about October last that the resources of I.D.A. were becoming so low that it was not possible for it to enter into commitments for more than a very limited period ahead. In that situation, the President of the World Bank, Mr. McNamara invited contributing members to make advance pledges pending the operation of the agreement in full.
On 17th December last, I was able to tell the House in reply to a Question by my hon. Friend the Member for West Lothian (Mr. Dalyell) that Her Majesty's Government were prepared to make an interim contribution of £21·6 million, which is the sterling equivalent of the dollar figure in the Order—in other words, a pledge of our first instalment under the second replenishment—provided that the House was prepared to agree to it.
I should make it clear that this advance contribution will count as the first contribution that we are due to make when the full replenishment takes effect. I should also tell the House that a number of other countries have announced that they also are prepared to make interim contributions to I.D.A. in these circumstances. Pledges have been made by Canada, Germany, Sweden, Italy, Denmark, Finland, and Norway—with ourselves, a total of eight countries, with a total pledge of 230 million dollars, a sum


which will allow I.D.A. to continue its lending programme.
This Order derives its authority from Section 1 of the Overseas Aid Act, 1968 At the time when that Act was before the House, it was assumed that subsections (1) to (4) of Section 1 would cover the second replenishment of I.D.A. without the necessity of coming back to the House. In fact, it has been necessary to lay an Order under subsections (5) to (7) of Section 1 because the full conditions of the second replenishment have not been fulfilled, for the reasons which I have given.
I think that I should say a word about the prospects, as I see them, for the full ratification taking place so that the second replenishment can go ahead as planned. As I indicated, the decision of the United States is crucial. My latest information is that the Banking and Currency Committee of the House of Representatives considered the I.D.A. Bill the day before yesterday. It took evidence from the Secretary of the Treasury, Mr. David Kennedy, and he indicated the strong support of the new American Administration for the ratification of I.D.A.
Following that session, the Banking and Currency Committee approved the I.D.A. Bill by a very large majority. It will be necessary for the Bill to be considered on the Floor of the House of Representatives and, by various procedures, in the Senate. I cannot anticipate what decision will eventually emerge or how long it will take for the matter to be dealt with. It is not for me, as a member of the British Government, to lecture the United States Congress; but it is reasonable to say that, because the attitude of the British Government and of the House is clearly in favour of a second replenishment, we certainly hope that the United States' ratification will take effect and will become an accomplished fact before very long.
Meanwhile, it is important that the operations of I.D.A. should be maintained. As I have explained, it has been necessary for a number of countries to pledge these interim sums so that the operations may continue without interruption. It is the view of Her Majesty's Government and of the other Governments that I have named that we can help in this way. I hope that the House

will agree and will see fit to approve the Order.

10.32 p.m.

Mr. Bernard Braine: I am sure that the House will be grateful to the Minister for explaining the Order in his usual clear and courteous way.
It will be recalled that there was general approval for the decision that the Government made last year to ratify the agreement—concluded I think in March, 1968—to replenish the funds of the International Development Association. Indeed, the Overseas Aid Bill, authorising a contribution of £64·8 million, which is no mean sum, in three equal instalments, was passed without a Division in both Houses.
It is generally agreed, I think, that this method of channelling aid to developing countries for carefully selected projects has much to recommend it. While I.D.A. finance is made available on soft terms, every application has to satisfy the strictest criteria. Before a project is approved, it is studied in relation to the whole economy of the recipient country. It must fulfil a priority need; it must be economically viable on its own account; the borrowing country must be prepared to put up a reasonable share in its own currency; and aid is not given to any country which defaults on its external debt or which nationalises foreign businesses without fair compensation. All that is very sensible. Moreover, a study of the list of projects already successfully undertaken by the Association shows the infinite value of this kind of development assistance.
But when we passed the Bill last summer it was still not certain what the future held for I.D.A. As the right hon. Gentleman has just reminded us, the original agreement to replenish the funds of the Association, to which we were party, could not become effective until at least 12 contributing member States, whose pledges aggregate not less than 950 million dollars out of a total contribution of 1,200 million dollars, made final ratification. That means that, without the American contribution, the agreement would be null and void.
By the time that our first contribution was due to be paid—namely, on 1st November of last year—the United States


Congress had not passed the necessary legislation, and it still has not done so.
Am I right in concluding, therefore, that the money we are authorising tonight in this Order cannot be paid over, and that the agreement made in March last year cannot be implemented until the Americans stir themselves and pass their own ratifying legislation? If so, a serious situation arises. I am greatly encouraged by the news of what has happened in Washington in the last few days, but we are being asked to authorise a massive sum of money to be paid out to an international organisation, the future of which is uncertain. What happens if the United States Congress refuses to ratify the 1968 agreement?
So far the Americans have played a leading and responsible rôle in the task of helping the poorer nations to overcome poverty and to speed development. From Marshall Aid to the American pledge to provide 40 per cent. of the I.D.A. replenishment funds, their rôle has been both honourable and indispensable, and it would be tragic if they faltered now. Already the aid efforts of the Americans, the French and ourselves, to take the three major donors, have tended to level off at roughly the levels reached in the early 'sixties. If the richest people on earth were now to turn their backs on the most pressing problem of our time, it would be disastrous.
So far I have seen no indication that this matter was discussed with President Nixon during his recent visit to Europe. Of course it may have been. But while the pursuit of European unity and the strengthening of the Atlantic Alliance are matters of the highest importance, in the long run the enjoyment of affluence and security by the western world will depend on the extent to which we are ready to help overcome the poverty and allay the dissatisfaction of the rest of mankind. I ask the right hon. Gentleman therefore what will happen to the I.D.A. and its activities if the United States Congress does not ratify the agreement?
I now turn to a technical point. The contribution authorised in this Order is not one in effect made under the March agreement, although in essence we are making the same sum available under some of the same conditions. The agreement reached in March, 1968, was made

after devaluation in November, 1967, and so presumably Her Majesty's Government committed themselves to a British contribution equivalent to 155·5 million dollars at their 1960 value, with their eyes fully open.
Let us look at the Explanatory Note to the Order. Why do the Government think it necessary to provide for
the payment of any sum which may be required to maintain the foreign exchange value of their contribution "?
If this means anything at all, it means that we are guaranteeing our contribution against the possible further devaluation of sterling. Is this not a very considerable confession of failure? Seeing that the agreement has not yet come into force, why is this necessary? How binding is this undertaking? I think that Parliament is entitled to an explanation
The third question that I wish to ask concerns the Government's view of the future of I.D.A., assuming that the present difficulties regarding replenishment are overcome. During our general debate on overseas aid on 7th May last year the right hon. Gentleman expressed himself in favour of shifting the emphasis away from bilateral aid towards multilateral aid, partly because multilateral agencies are better equipped to take a broader view both of the developing world's needs, and the means of meeting them, and partly because recipient countries prefer this kind of relationship. I do not think that anyone would quarrel very much with that.
Later, when we discussed the Overseas Aid Bill, the right hon. Gentleman said that he expected that the proportion of our official aid going to multilateral bodies would increase from 11 per cent. in 1967 to about 15 per cent. in 1968, the largest factor in the increase being the higher contribution that we were making to the I.D.A. In the event, that contribution was not made last year; we are authorising it now, and the shift that the right hon. Gentleman was talking about probably did not take place at all. Does the right hon. Gentleman still adhere to that view? Certainly multilateral agencies have an important rôle to play in bringing aid to the developing countries, but they are only one of the weapons in the armoury of our development effort.
I ask this question for two reasons. First, there appears to be a trend in the United States and France towards a reduction in the flow of official aid, offset perhaps by a desire to increase private investment. It is true that what matters to developing countries is the total inflow of financial resources, and clearly there must come a stage where their infrastructure has been developed with official aid to the point where what is then needed is an injection of the skills and experience that only private investment can bring.
If the reverse trend is practised here, with Britain continuing to put money into infrastructure development overseas whilst actively discouraging private investment, as I am afraid the Government have been doing, then in the long run the advantage to Britain of any expansion in the wealth of developing countries will be diminished in relation to that enjoyed by other aid donors. It is right for us—I have always tried to do it from this side of the House—to stress the need for the strong to help the weak. I yield to no one on that. But it is politic also to remember that we are spending here the taxpayers' money.
The second reason for asking the right hon. Gentleman whether he stands by what he said about increasing our contribution to multilateral agencies at the expense of bilateral aid arrangements is this. If Britain was in a strong enough position to increase the total aid she gives to developing countries, a shift of emphasis such as the right hon. Gentleman was suggesting might not matter. In fact, it might be a good thing, because as a trading country we have a direct interest in seeing that the total international volume of aid is increased. Indeed, experience has shown that we gain substantially from untied project aid financed by agencies such as the International Development Association. But we are not increasing our total aid in any significant sense. The right hon. Gentleman will know better than most that our——

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Gentleman is going rather wide of the Order. He is concerned with other than the additional contribution, which is the subject of the Order.

Mr. Braine: You are very kind, Mr. Deputy Speaker, in allowing me to develop this argument which I hope to show very shortly has relevance to the Order.
The right hon. Gentleman will know that our aid performance expressed as a percentage of gross national product has been declining in recent years. We had some figures from the Parliamentary Secretary on 28th January which showed that our official and private aid expressed as a percentage of gross national product was lower in 1967 than in any year since 1961. I would guess that the comparable figure for 1968 was lower still. All this should be a matter of concern to the Government.
The White Paper on Public Expenditure suggests that our gross aid will rise a little from current levels, but so also will repayments on past loans, so that net aid, which is what counts when we are thinking in terms of the U.N.C.T.A.D. target, is not likely to rise at all. In short, I have the impression—and it is against this background that we must look at this Order—that the Government have no clear idea of what they are trying to do in the field of aid.
Here we are authorising a substantial subscription to the funds of an international organisation. At least that organisation publishes details of its activities. The benefits can be quantified. The book is there for all to read. But there is still a widespread ignorance of what is happening over the wider field of the British aid effort. The picture is diffuse. I think we provide aid to over 100 different countries, although 90 per cent. of what we provide is concentrated in about 30 countries. I wonder whether we are making the best use of our slender resources in this way. Has anyone got the answer?
Although the right hon. Gentleman's Ministry publishes a mass of statistics and the occasional White Paper, there is nothing to compare with the detailed discussion of conditions in those recipient countries which the United States Administration presents to Congress before the latter takes decisions on aid. The Americans work out, especially in the case of countries where they are the major donor, clear objectives for the kind of development that they are willing to support. They calculate how their aid


will contribute to the general development programme and concentrate on particular sectors, agriculture, say, or communications, where there are major obstacles to economic growth, and then concentrate their aid on those sectors. Are we doing this? Certainly, there is a need for greater scrutiny by Parliament of our aid effort, and with greater scrutiny should come a clearer sense of purpose of what we are trying to achieve. This is why, in passing, I warmly welcome the proposal for a Select Committee on Aid and Development.
Judging from the record of the I.D.A., the money which we are authorising will be well spent. That leads me to my last question. Some of that money will be spent in countries where we are already providing bilateral aid, or where we and other national and international bodies are sharing in development programmes. What co-ordination of effort are we making on our part to ensure the maximum efficient use of resources? Can the Minister give some examples of how I.D.A.-financed projects dovetail into development financed by other British aid?
This is a highly technical subject, but I thought it right to ask a number of questions about the Order and, perhaps even more important, about the thinking behind the British aid effort of which this contribution is part. Subject to our receiving satisfactory answers, my hon. Friends and I will not wish to impede the passage of the Order: indeed, we shall give it our warm support.

10.47 p.m.

Mr. Lewis Carter-Jones: I should like to pay a tribute—I hope that he does not treat it with suspicion—to the hon. Member for Essex, South-East (Mr. Braine) for the sincerity with which he always speaks on this subject. It is rather nice to have a bilateral policy on a subject which is controversial outside the House. Certain of his questions needed to be asked, but in essence he was in broad agreement with the concepts and aims of I.D.A.
The Estimates Committee, on which the hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles) and I served, said that the aid of donor countries

… is co-ordinated through I.D.A. rather than competitive and the recipient country has a much clearer idea of the budget within which it must make its development plan.
This is why it is important tonight to get the I.D.A. replenishment Order fixed and give the American Government time to make up its mind. I hope that they do not take too long about it, because, although they may be talking about small sums relative to their national budget, these sums are critical for the underdeveloped countries.
I am sure that I carry the hon. Member for Essex, South-East with me when I make a comparison with the thousands of millions of pounds of which we spoke in the defence debate earlier this week and the tens of millions which are the subject of this debate tonight. The tens of millions under this Order will lead to greater security for the world than the thousands of millions we spoke of earlier in the week. This work is vital.
I find it a little paradoxical that not so long ago I was critical of Mr. McNamara's rôle in the United States because he was concerned with defence, but I am much happier about his present rôle. I like to think that his skills, judgment and ability can be used to far greater effect for the good of society the world over in his present rôle. Our passing of this Order, allowing for continuity, will, I hope, persuade the American Government that they ought to make the maximum use of their highly skilled, efficient ex-civil servant to perform a task for the world at large. I very much hope that the holding operation on which we are now engaged—for that is what it is—will tide over the period before the American Government see the light in the best sense of the word.
I have no doubt that my hon. Friend the Member for Portsmouth, West (Mr. Judd) will hope to catch your eye, Mr. Deputy Speaker, but I hope that he will not mind if I "pinch" one sentence from the letter which he wrote to The Times on Tuesday last and in which he spelled out what the I.D.A. is all about:
It would damage the reputation of America both with her allies and with the countries of the developing world if the second replenishment were frustrated by her failure to ratify.
That is the key to the situation.
I was delighted when the hon. Member for Essex, South-East, while questioning some of the long-term aims and posing


some of the difficulties which might arise, gave a general blessing to the concept of an early replenishment. I end with another quotation from the 1967–68 Report of the Estimates Committee on Overseas Aid. I know that the hon. and gallant Member for Winchester will agree when I say that the Committee spent a great amount of time on this matter and was entirely satisfied to say, in paragraph 54:
Your Committee are also convinced that the contribution made to I.D.A. is among the most effective forms of aid given by this country. Despite the present difficulties facing the replenishment of I.D.A. funds, indeed because of them, the British Government should take the initiative in seeking to ensure that the maximum use is made of I.D.A.
To night, I have great pleasure in being present in the Chamber to see the Minister and the Opposition in agreement on the importance of this work, and I greatly hope that the Government's action, supported by the Opposition, will lead the Americans quickly to make up their mind in favour of replenishment.

10.54 p.m.

Rear-Admiral Morgan Giles: I, too, appreciate the opportunity to speak in this debate, when we are not indulging in the system of competitive insult across the Floor. I have two technical questions to put to the Minister and some more general comments to add. First, I have a question on Article 2. Why is the sum shown in United States dollars? I know that the accounts of the I.D.A. are kept in United States dollars, but the Article refers to
weight and fineness in effect on 1st January 1960".
That must be a known quantity. Is it not, therefore, possible for the Government to show in the Order the equivalent sum in sterling? We are being asked to pass more or less on the nod a large sum of money, by my reckoning £15 million or £20 million. It would be of assistance to the House and the public if the Minister could indicate, for the layman, the sum involved in £s.
Article 3 appears to be an open-ended commitment, without limit or need for further affirmative Order by the House. Perhaps the Minister could enlighten us whether this is so. Article 4 refers to redeeming non-interest bearing and non-negotiable notes. Could the Minister explain what it means? I am glad that

tributes have been paid from both sides to the work of the I.D.A. and that the Government are contributing promptly to its funds.
I do not feel that it is for us in this country to prompt the United States on this. As was said recently when their representative was in the Gallery, it is for this nation to recognise what has been done for the world and for this country by the United States ever since the war.
Another hon. Member and I recently saw the Mangla Dam in the Indus Valley. It is the biggest earth-filled dam in the world, which will be of enormous benefit to agriculture and provide electric power and which will greatly assist towards the removal of potential causes of war between India and Pakistan. I am glad that British consultants played such a big part in this I.D.A. project. I hope that the money we are approving this evening, perhaps not with a label round its neck, will find its way into that sort of project, perhaps the one at Tarbela, some way up the Indus from the one we saw.
I think that what I have said shows that I am in favour of economic aid to underdeveloped countries whatever our differences here, because it is essential that we in this country should not become inward-looking. The aid we are discussing tonight is correlated to defence, which we discussed earlier in the week. I differ slightly from the hon. Member for Eccles (Mr. Carter-Jones). I cannot agree that there is a comparison between defence and economic aid here. I suggest that freedom from want and fear are the two things which must be achieved, particularly in Asia and that those two freedoms go together. This is one reason why my hon. Friends and I continually urge a military presence of sorts east of Suez.

10.59 p.m.

Mr. Arthur Blenkinsop: I join in welcoming the action of the Government in bringing this Order forward to ensure that this important work is carried on.
I wish to clear up some points. My right hon. Friend said that under this scheme the programme was untied. Is this true? Special provision was made to enable the American Government to ease their own trade balance position.


This facility would be open to other countries if they desired and if circumstances warranted. The understanding, I gather, is that if the American Government ratify this proposal, as we all very much wish them to, the sums as they are released, at least initially in the first period, will be spent within the United States. In that sense, the procurement provision is tied to that extent. There will still be the balance of the United States' contribution which will be called upon later, which will, presumably, be open for wider procurement. It is important to put that point, because it seems to me that every effort has been made to try to meet any anxieties in the United States on this matter.
Those anxieties are in some respects understandable, because a great deal of the funds provided by the Americans has been used for purchases elsewhere than in the United States. We are in the fortunate position that the funds which we use are more than refunded, in the sense that more than the £ value comes back to us in purchases, whereas the United States have not been in quite that same happy position. Therefore, one understands some of the difficulties in the United States. We very much hope that there will not be any further delay in their ratification. I merely wished to have confirmation from my right hon. Friend the Minister that this special easement had been provided for.

11.2 p.m.

Mr. John Tilney: I intervene only briefly. My hon. Friend the Member for Essex, South-East (Mr. Braine) addressed some pertinent questions to the Minister. He also mentioned the importance of infrastructure. Quite often, we use that word not really knowing what it means or whether it refers to roads, power or great dams, such as the Mangla Dam, which I have seen.
One occasionally does not ask the right questions about whether the money is properly spent on those projects and whether, once a project is completed, there will be the right demand for power or whether the water that is impounded will be needed further downstream. One knows very well that in the case of the Volta Dam there is a surplus of power,

as there will be, possibly, for generations. One has seen the great roads built by the French in Dahomey, a great infrastructure and important, but Dahomey still remains one of the poorest countries in Africa.
It is important that trade and light industry should follow the infrastructure. That is why the question put by my hon. Friend the Member for Essex, South-East about private enterprise following up on projects and infrastructure is so extremely important.

11.4 p.m.

Mr. Frank Judd: It is a pleasure to follow the hon. Member for Liverpool, Wavertree (Mr. Tilney), because we know of his long-standing and deep interest in these subjects.
We are discussing tonight an aspect of multilateral aid. It is always good to see the Government recommitting themselves, by a practical Order of the kind that is before us, to the priority which, they say, they are now giving to multilateral aid in the context of our overseas aid and development programme generally.
Two points should be made about the significance of a multilateral aid programme of this kind. First, it has distinct political advantages. We cannot escape the fact that bilateral aid programmes have connotations of neocolonialism which are not always acceptable to the receiving countries. Multilateral aid programmes of the sort being discussed tonight have the advantage of a certain degree of anonymity about the origin of the resources which are applied to them.
The second point, which, I feel, is even more important than the political aspect, is that consideration of efficiency and effectiveness in the field. One of the great potential advantages of multilateral aid is that it avoids unnecessary duplica-cation between competing bilateral programmes. It also assists the planning resources of individual developing countries. Frequently the limited resources for local economic management are put under considerable pressure by different programmes pressing in on the country, each with different terms of reference and each going to the heart of a specific economic development within that


country, while perhaps paying lip service to the local ministry or department of planning, and introducing a fragmentation at a time when cohesion in economic development is essential.
The I.D.A. is one of the important arms of the World Bank. The World Bank has a reputation second to none in many ways in multi-lateral development projects, but there have been two reservations about its programmes and they stressed the need for the introduction of the programmes of I.D.A.
The first was that the World Bank's programme was limited in the sense that some of its success was due to the fact that it always invested in clearly identifiable projects and looked for a sound return on capital in clearly traditional concepts. The advantage of the I.D.A. was that it introduced, as a result of American initiative, assistance on more favourable terms.
I stress that this was a United States initiative., although in doing so I do not in any way wish to embarrass the U.S. in its present consideration of replenishment. I wish to pay tribute to those who started the I.D.A. and it is worth noting some of the arguments they used at that time. It was first proposed in a Resolution of the United States Senate or 23rd July, 1958, when Senator Monroney of Oklahoma clearly set out its purpose. The Resolution had as its purpose
Providing a source of long-term loans available at a reasonable rate of interest and repayable in local currencies, or partly in local currencies, to supplement International Bank lending activities and thereby permit the prompt completion of worthwhile development projects which could not otherwise go forward.
Later the Resolution was concerned with
Insuring that funds for international economic development car. be made available by a process which would encourage multilateral contributions for this purpose.
This showed great imagination on the part of the Americans in 1958.
This was followed a year later when President Eisenhower's Secretary to the Treasury, Mr. Anderson, made the proposition at a meeting in 1959 of the governors of the World Bank. It is interesting to note that at that meeting President Eisenhower himself delivered an

address in which he referred to the importance of the I.D.A. He said:
It is recognised, however, that there are many development projects which, though economically sound, cannot be financed by existing international institutions. To meet this situation, the United States Governor of the Bank has proposed the creation of an International Development Association as an affiliate of the Bank.
In that message to the governors of the World Bank, the then President clearly identified himself with the need for the I.D.A. Now the I.D.A. has become the world's major source of soft-term multilateral aid.

Mr. Deputy Speaker: Order. The hon. Member is going wide of the Order. We are not discussing the principle of I.D.A. but the contribution which is the subject of this Order.

Mr. Judd: I thought that in taking this essential step this evening we have to consider the importance of the I.D.A. in relation to soft-term multilateral aid. Hon. Members have referred to the fact that we now see the future of I.D.A. in jeopardy because of doubts and hesitation in the United States about replenishment. We must recognise that the United States has had difficulties in terms of acute balance of payments crises, but, as was pointed out by my hon. Friend the Member for South Shields (Mr. Blenkinsop), we and the other members of I.D.A. have put forward proposals which would lighten the burden on the United States in this respect.
As we send from this House this evening our message to our colleagues in the United States asking them to speed as much as possible the commitment of the United States to replenishment, we could not do better than quote what Senator Monroney said in the debate which initiated the whole introduction and establishment of this important arm of multilateral aid. He said:
Americans are becoming increasingly convinced that sponsoring military buildup in an effort to discourage external attack, provides a hollow shell of strength, unable to withstand the mounting pressures from within these nations. This pressure is being generated by what Adlai Stevenson called the revolution of rising expectations. Around the globe captive peoples are in revolt—in revolt against the captivity of poverty, of social immobility, of disease, of national inferiority. These demands for an equitable share of the world's goods, and recognition as a significant force


in the world's culture, constitute the basic reality of our age—more basic and more pervading than atoms, or sputnics, or political alliances.
This short and interesting debate has made clear that this House is united in urging our friends in the United States to give their support to replenishment of one of the greatest brain childs of the previous Republican Administration under President Eisenhower.

11.14 p.m.

Mr. Prentice: I ask permission to speak again, first to welcome the speeches made from both sides of the House in this short debate. They have signified the general agreement in all parts of the House with the Order and approval of the philosophy of I.D.A.
One or two hon. Members have perhaps strayed a little wide of the Order and I shall resist the temptation to follow them along the paths they have trodden, except to say that the fact that hon. Members do so on these occasions indicates that we would welcome wider opportunities for discussion of some of these points. It also indicates that it is a good thing that we are to have a Select Committee on aid and development in which a number of these points can be examined in depth and detail with more time available to do so than is normally the case on the Floor of the House.
The hon. Member for Essex, South-East (Mr. Braine) said he assumed—I hope that I got it right—that the sums provided for in the Order could not be actually paid over to I.D.A. unless the United States ratified the agreement. That is not so. We are making a pledge here which can be taken up by I.D.A., a pledge which applies to the amount of money provided here. It similarly applies to the other seven countries which have entered into similar pledges. He asked what would happen if the United States Congress failed to ratify the agreement. I do not think that we shall need to face that possibility. The policy of supporting I.D.A. is the policy of the previous Administration, which signed the agreement last March, and of the new Administration, as evidenced by the statement made by the Secretary to the Treasury two days ago to the relevant Committee of the House of Representatives. I do not think we should expect

that there will not be ratification, so it is a hypothetical question. If such a situation were to arise, clearly all the countries concerned would have to get together and consider what future arrangements might be made to replace I.D.A., but this is something which I do not think is likely. We can all assume that it is likely that there will be ratification by the United States and, indeed, by the other countries which have not yet ratified the agreement reached last March.

Mr. Braine: Do I correctly understand that the Minister is saying that until such time as the agreement of March, 1968, is ratified by a sufficient number of States, which must include the United States, the contribution we are authorising tonight may be pledged but cannot be spent?

Mr. Prentice: It could be spent. I.D.A. will have available now certain amounts of money in the fiscal year 1968–69 which for bank purposes ends in June. It is a different fiscal year from ours. My latest information is that I.D.A. will have available about 380 million dollars of old resources, including the bank transfer of 75 million dollars, 235 million dollars in advance contributions, which is part of what we are discussing this evening, and a 15 million dollars special contribution from Denmark. From these resources I.D.A. has recently made commitments totalling 200 million dollars, which includes credits to India for 125 million dollars, which will be of great importance to the Indian economy. It can proceed to use the other money within that total that I have mentioned.
The purpose of this operation and of similar arrangements in the other countries which have made similar decisions is to enable the I.D.A. to have a fund of resources to finance its operations while it is waiting for the agreement made last March to be implemented. The money can be used in the interim period.
The hon. Member for Essex, South-East and the hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles) asked about the paragraph that pledges the money in dollars and also about the provision for necessary adjustments if there is an alteration in value as between the £ and the dollar.


This has no special significance. It is the standard text for the general agreement reached last March and for previous agreements—the first I.D.A. Agreement and the first replenishment as well—by which all the countries which pledged money pledged it in dollars and pledged to make up the dollar value of their contribution if that were necessary. It is in the same form for all the donor countries.
The hon. and gallant Gentleman is right in saying that the text of the Order would enable us to make the extra payment without coming back with a new order, if that became necessary, but I do not expect that this will be so. We have simply used the normal form of the agreement which has been used in the past by all the donor countries for the original contribution, the first replenishment and the second replenishment.

Rear-Admiral Morgan Giles: Would it become necessary if there were a change in the exchange rate?

Mr. Prentice: Yes; it would become necessary if there were a change in the exchange rate. The same would apply to other donor countries as well.
The hon. Member for Essex, South-East raised the larger question about the trend to multilateral aid. He is right to say that I have said on more than one occasion that it is the Government's view that we should see a shifting emphasis year by year to a larger amount of our aid going through multilateral agencies. I have said that in the current year there would be an increase for various reasons, the main one being the higher level of I.D.A. replenishment. This will still apply, though perhaps not quite to the same extent.
We ask in the Order for the authority of the House to commit our first instalment of the second replenishment. This would have become due anyway last November if the whole matter had not been held up by the delays in ratification. We are asking for it a few months later, but still within the same British financial year, and also within the same Bank fiscal year.
Because of the delay in ratification, there might be some delay in the drawing down of the British contribution, and, when we work out the percentage for

the current year, rather less might go on multilateral aid than I had thought, but I do not think that there will be a very big difference. Certainly, the trend is there. The trend to which I referred depended not only on the I.D.A. contribution but on the larger amount contributed to the United Nations development programme, and to other forms of multilateral aid.
The hon. Gentleman also talked about the need for more information about our aid programme generally. This was a bit wide of the Order, but I should like to say one thing about it. He is aware that I promised the House a White Paper which will reply to the points recently made by the Select Committee on Estimates. This will include references to information. I have been studying this question for some time with a view to trying to meet criticisms about information on these matters, although I would suggest to the hon. Gentleman that quite a lot of information is available. He and many other hon. Members show that they have quite a lot of information on this subject, which they can dig out from material provided by the Ministry of Overseas Development.

Mr. Carter-Jones: Could we have an assurance that the White Paper will appear before the Select Committee is established? It would be rather nice for the Estimates Committee to look at the White Paper before any other Select Committee is established.

Mr. Prentice: I think that the White Paper will appear in about two weeks, which will almost certainly be before the Select Committee is established.
The hon. Gentleman also talked about co-ordination between the operations of I.D.A. and bilateral donors. This is provided for in a number of ways. For each of the two biggest recipients of I.D.A. credits in recent years—India and Pakistan—there is a consortium of aid donors chaired by the World Bank. This system allows for co-ordination between the I.D.A. credits available and the bilateral aid from all the main donors.
The arrangements for the other countries vary, but there are several different forms of consultative committees for particular countries or groups, very often chaired by the World Bank. It is part


or our policy to see that there is coordination anywhere that we have a major programme. The arrangements vary from one recipient country to another, but this is very much one of our concerns in making certain that there is no overlapping of the effort.
The hon. and gallant Member for Winchester asked about paragraph 4 of the Order. The payment of our contribution to I.D.A. is in the form of notes which I.D.A. can encash. In other words, we redeem them as it needs to draw on our contribution. The paragraph makes it clear that this can be done, and provides for it in the necessary technical terms.
My hon. Friend the Member for South Shields (Mr. Blenkinsop) was right in saying that the system of credits under the I.D.A. is not 100 per cent untied. He referred to the special arrangements with the United States. But it is fair to say that this does not mean that the American contribution will be tied eventually to American procurements but that the drawing arrangements for the United States provide that, initially, its contribution is drawn down to the extent that there is American procurement and that the balance of the contribution can be deferred for up to three years. But, in the end, the contribution is drawn down irrespective of the procurements which the United States manages to obtain.
In relation to the interim arrangements provided for by this Order, and similar pledges made by the seven other donor countries, that consideration does not arise. We are assuming that the drawing down will be in proportion to the amounts of the various pledges, and none of the eight countries concerned has any special arrangements similar to those made for the United States.

Rear-Admiral Morgan Giles: While the right hon. Gentleman is on technicalities, could he answer the point about sterling equivalents so that the public may know approximately what sum is involved? It seems that about a dozen right hon. and hon. Members are tonight granting supply of about £100 million each of the taxpayers' money.

Mr. Prentice: I thought that I had answered that point in reply to the hon.

Member for Essex, South-East. The hon. and gallant Gentleman will see what I said in HANSARD. The amount of sterling equivalent is £21·6 million. That is the equivalent of the amount in dollars.

Rear-Admiral Morgan Giles: Could it be put in the form of a table?

Mr. Prentice: I am not sure whether that is possible, but I will consider it.
I hope that I have given sufficient information now to the House and I welcome the support given to the Order by both sides. The Order provides for an important interim contribution to the funds of the I.D.A. so that it can continue the most important work that it is doing in the developing countries. If it were not able to carry on in this difficult interim period, many of the poorest developing countries would not be able to get the resources they need and which we and our opposite numbers in other countries wish to provide. It is in that spirit that I commend the Order.

Question put and agreed to.

Resolved,
That the International Development Association (Additional Payments) Order 1969, a draft of which was laid before this House on 21st January, be approved.

CIVILIAN ARMY VEHICLE DRIVER (PROSECUTION)

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Concannon.]

11.27 p.m.

Mr. W. T. Williams: Twenty years' membership of this House has given me little faith in Ministers. That is not cynicism, for it is, I think, a good authority that warns us not to put our trust in princes.
My constituent, Mr. Anderson, is a man of a simpler faith. He was employed in 1966 as a civilian driver for the Territorial Army in Warrington. In March that year he was given by the Ministry of Defence a dangerous lorry to drive. In the result, he was involved in an accident, prosecuted and fined. His licence was endorsed and, on that wet afternoon in March, he forfeited 27 years' safe driving record.
In the simplicity of his faith, Mr. Anderson thought that if he reported the matter to the Ministry of Defence it


would do all that lay in its power to help him. He was mistaken.
Immediately the matter came to the notice of the Ministry of Defence it did what Government Departments always do, it rushed madly to put around it a strong shield of self-defence. I had a long and somewhat acrimonious correspondence about this matter with my hon. Friend, because I share to some degree the sense of indignation with which Mr. Anderson has been suffused from that day to this. I have some disappointment in my hon. Friend, because every time that I have written to him trying to explain to him what it is that has given rise to this burning sense of injustice over the years in this man's mind I received from him what I can only describe as typical Departmental replies. I do not know how much care he has taken to inquire into the facts of this case for himself or to what extent he has been content to sign letters written for him by his Department, but I do know that any real inquiry would not have satisfied him to a degree which would have led him to send me the replies that I have received.
In the first letter I sent I told him that this man was given a lorry to drive from Warrington to Liverpool; that while driving it on that road he discovered that the tyres were grossly unsafe and that the lorry was mechanically deficient. When he got to Liverpool he asked that it should be examined, It was condemned by the examiner who told him to take it back to Warrington and that new tyres would, in due course, be sent. On the way back to Warrington, although he was driving with care, as one might expect of a man with his: record, the lorry skidded because of its tyres on the wet road and he was involved in an accident with two other cars, which led to his prosecution.
He immediately wrote to the sergeant in charge of his Territorial department by means of a recorded delivery letter. The date of the letter was 11th July, 1966, and the recorded delivery number is D 236515. He reported the accident and asked for advice. He was tried on 18th July, 1966, seven days later. In replying to my first letter asking that some support be given to this man, that some apology might be offered to him

because, by reason of the negligence of his Department, he had been put into this situation, my hon. Friend sent me a letter in which he said that the inspecting officer, having looked at the tyres, said that they were considered to be safe for another thousand miles and the Territorial unit was given authority to get replacements before the old ones wore too low. In a later Press statement, much later, after this man had, in his indignation, written to the Queen, his Department authorised publication of a statement which said that the vehicle tyres were condemned as unroadworthy, examined and sentenced for replacement in anticipation, but at the time of the examination were still serviceable. Tyres that have to be condemned are not tyres that are fit for a thousand miles of travelling. In the event, this poor, miserable man had to take the lorry or lose his job and, within 15 or 20 miles, was involved in an accident which a police officer said in the course of his trial was largely due to the tyres that were grossly worn.
It was the clear duty of the Ministry of Defence to obtain that statement of the case and look at what was said. There were people present in the court that day, though not sent from my hon. Friend's Department, who could have and probably did report back that this man had said that his tyres were worn and that he was under an obligation to drive the lorry.
In his first letter to me, my hon. Friend said that Mr. Anderson did not tell his unit or my hon. Friend's Department of this accident until after the hearing. The recorded delivery letter gives the lie to that. That letter should exist in the Ministry's files, because its recorded, delivery exists in the Post Office to this day. Why, then, was my hon. Friend satisfied to send me this reply, which in almost every respect was untrue?
The Ministry of Defence should have taken the trouble to find out what the position was from the letter which undoubtedly it received, but this man had no one from the Department in court to give evidence. It is manifest that, if the lorry was examined after being brought from Warrington to Liverpool, it must have been done because the man complained about its condition. But so cursory, apparently, was the examination


that the examiner, for whom my hon. Friend expressed some praise in his letter, did not bother to examine the lorry's mechanical condition. He said that he was only asked to examine the tyres, and did not think to look at the vehicle's mechanical condition.
Someone from the Department should have been in court to give a report on the condemnation of the tyres and the mechanical condition, which might have assisted this man to preserve his good record.
In the event, he wanted to appeal and to subpoena someone from my hon. Friend's Department to give the kind of evidence which he thought might clear his name. It might not have done, of course, but whether he was properly convicted is irrelevant to the fact that he was anxious to clear himself of careless driving. He wanted to subpoena the kind of evidence which should have come from the Department in the first instance. However, he was too poor to do that. The appeal has gone by default, and we understand that the papers have been destroyed.
My object in raising this subject tonight is twofold. It is to give publicity to what I regard as the wholly improper covering up of matters for reasons which reflect no credit upon the Ministry of Defence when it is dealing with someone who, by its standards, I suppose, is unimportant. It is also because I think that, even at this late date, the Ministry ought to make some acknowledgment of the sense of protest that this man has felt—this sense of burning injustice. The Ministry can do nothing for him after this long time, but it can come from behind its cover and express some regret for the way in which it has treated him and in that way, if in no other, make some recompense.
I hope that my hon. Friend, when he replies, will not repeat the kind of things that he has put in the letters that he has written to me. They have wholly missed the point. In the illustrations that I have given, it is perfectly clear that he has either been misled or that he has not really looked at all the papers in the case, because some of the things that he told me were, frankly, untrue.
For these reasons, I share some of the indignation that this man feels, and I hope

that the Minister tonight will make such recompense as is within his power.

11.41 p.m.

The Under-Secretary of State for Defence for the Amy (Mr. James Boyden): I will clear up three points at once. First, no letters go out from the Department over my signature without my personal attention. Secondly, I have given this matter considerable personal attention and made full inquiry. Thirdly, nobody in the Department is unimportant in my eyes, whether he be a humble driver, a humble private or a general.
This case, as my hon. and learned Friend has indicated, is now three years' old and it has entailed a correspondence not only with the Ministry of Defence and myself, but with Her Majesty, the Prime Minister, the Home Secretary, and the Minister of Transport. I very much regret that, notwithstanding all this, Mr. Anderson still feels himself aggrieved and to have been unjustly treated. I do not as I have made clear to my hon. and learned Friend a number of times, believe his constituent is justified in so feeling, and if this debate now serves in any way to help clear up misunderstandings and allay suspicions, then it will have served a valuable purpose.
In March, 1966, Mr. Anderson was employed by the Territorial Army as a civilian driver with 436 Light Air Defence Regiment, Royal Artillery, of the Territorial Army at Warrington. On 10th March he was instructed to take a unit vehicle to 42 Command Workshops R.E.M.E. at Deysbrook for a tyre inspection. This was done. The inspector, who had 14 years' experience and was a very valued member of the Department, considered that the tyres were fit for another 1,000 miles driving, but that during the period arrangements should be made for replacements to be provided.
On the way back to his unit, Mr. Anderson had an accident in which two civilian vehicles were involved. The police charged him with driving without due care and attention, and, as my hon. Friend says, Mr. Anderson was fined £10 and his licence was endosed at a court hearing on 18th July that year.
Mr. Anderson criticises the Ministry of Defence on four counts. First, that the accident was attributable to the state of the tyres, yet he was punished for it. Secondly, that the charge against him


was so framed as to divert attention from the real cause of the accident—the state of the vehicle and the Ministry's responsibility for it—to his own driving. Thirdly, that during the proceedings there was no representative of his unit in court with him and he was provided by the Department with no legal defence. Fourthly, that, after conviction, the Army Department both re-employed him and accepted liability for the third party claims arising out of the accident, thereby tacitly acknowledging its responsibility for the accident in the first instance.
As my hon. Friend may well expect, I do not accept the substance of these charges. First, the condition of the tyres. It is the normal practice for an Army vehicle to have its tyres inspected before they reach a point at which they are no longer lit to be used. The object of this is to ensure that a vehicle does not stand idle while replacement tyres are being ordered and delivered, and that, instead, this provisioning action takes place during the final phase of the tyres' useful life. It was precisely for this purpose that Mr. Anderson's vehicle was sent to Deysbrook in March, 1966. At the inspection the technical inspector judged, from the remaining tread on the tyres, that there was a further 1,000 miles safe use, but that provisioning for replacements should be put in train. That was done. There was therefore no question whatever of the tyres being "condemned", an expression Mr. Anderson has used about the results of this inspection. There was nothing wrong in his being required to drive the vehicle back from the inspection to his unit.
After the accident there was no mention of the state of the tyres, either in the chief constable's report of the accident, or, indeed, in the written reports that Mr. Anderson and his passenger made immediately after the accident. Surely there would have been such a reference if the tyres were indeed the main factor in the accident?
No appeal was lodged against the court conviction, and my hon. and learned Friend knows that in these cases the court proceedings are destroyed, so this was normal, and therefore there is nothing available for us to check with regard to the court proceedings. I have had inquiries made where I could of all the witnesses, where available, and one of

the two witnesses who Mr. Anderson himself called on his behalf stated in court that he was questioned about the tyres, and said that they were fit for use, although due for replacement under the procedure I have already described.
I have no reason whatever to doubt the technical inspector's competence to assess the state of the tyres. Having made the assessment that he did, it follows that it was entirely right for Mr. Anderson to be required to return with his vehicle to the unit.
As to the second point, the nature of the charge preferred against him, it is entirely a matter for the chief constable to decide—and I am sure that my hon. and learned Friend knows this—whether to institute proceedings in a particular case, and if so the nature of the charge. There is no question of different treatment being accorded to Army drivers in cases of this sort. Section 3 of the 1960 Road Traffic Act, under which Mr. Anderson was charged, applies to all persons and vehicles in the public service of the Crown, whether they be Army drivers—military or civilian—or private citizens. There is no question whatever of the Ministry of Defence or anybody else trying to influence the police in the nature of the charge preferred, nor of the police being open to any influence of this kind.
Mr. Anderson's third point refers to unit representation at the proceedings, and to his defence. As my hon. and learned Friend knows, Mr. Anderson had resigned from his employment with the unit before the court proceedings took place. Further, we have been able to find no evidence that he formally notified the unit of the time and place of those proceedings. My hon. and learned Friend says that there is a recorded delivery certificate, but it looks to me as though this would have arrived after Mr. Anderson had left the employment of the T.A.
However, it is true that when Mr. Anderson knew that proceedings were to be instituted he wrote to two members of the unit asking them to attend as witnesses, but we know that he did this directly, and not through the unit. Mr. Anderson also claimed that the unit R.S.M. was aware of the position. We have been able to get in touch with the


unit R.S.M., and, while he remembers Mr. Anderson, he does not recall the latter telling him anything about an impending trial.
That, however, does not substantially affect the question of legal defence. The position about legal defence is that it is not, as Mr. Anderson may have supposed, automatically provided when a Crown servant is charged with an offence under the Road Traffic Act. The Claims Commission of the Ministry of Defence takes its decision on the merits of the case. In this instance, by the time the case against Mr. Anderson was heard it was clear that the two civilian vehicles involved could be regarded as in no way responsible for the accident, and that the Ministry of Defence therefore would have to accept liability for civil claims arising out of it. From the Commission's point of view, therefore, there would have been no justification for spending public money on a defence where the other two parties involved were so clearly free from blame. In normal circumstances the Commission's decision not to provide a legal defence is notified to the person concerned, and it is also normal for the Commission, if it hears of proceedings pending from the police, as in this case, to notify the unit concerned.
In this instance neither of these things was done, for which I apologise. This was an administrative error which only recently came to light as a result of my investigations. However, that does not affect the situation that the Claims Commission would not have provided legal defence in this case.
Finally there is the question of the Department's apparent acceptance of responsibility in that it accepted claims arising out of the accident, and subsequently re-employed Mr. Anderson. There is nothing unusual in that. The fact that a potential employee may have had a traffic accident is not of itself grounds for refusing employment. As to the Department accepting civil claims, we had no choice; there was no doubt that the other two parties were in no way to blame. In cases like this, as my hon. and learned Friend knows, the Department is responsible for the torts committed by its servants, in exactly the same way as any other employer. But paying the civil

claims in no way implies that the Department is directly to blame for the actual accident and that Mr. Anderson is not responsible.
Finally, Mr. Anderson has said that the vehicle was not used after the accident, so implying that the Department acknowledged that the tyres were responsible. Nothing of the sort is involved. Where a vehicle is in an accident, in which civilian vehicles are involved, as this one was, it is mandatory for the Army vehicle to be inspected by a competent R.E.M.E. engineer to assess the damage. For this reason it is normal practice for the vehicle not to be used on the road until this assessment has been made.
It is also normal practice after any accident involving damage to a vehicle, where it is suspected that damage arising from the accident renders it unfit, for the vehicle not to be used on the road until it has been inspected by a competent R.E.M.E. engineer.

Mr. W. T. Williams: May I ask one question? Is it not the fact that before that vehicle was put back on the road, all its tyres were replaced, or certainly before it had done another 100 miles?

Mr. Boyden: That I shall have to check.
I turn now to matters which concerned my right hon. Friend the Home Secretary. I understand that in recent correspondence Mr. Anderson asked for his case to be re-tried and asked for legal aid. He also complained that a letter he had sent to the clerk to the justices asking for legal aid to enable him to appeal against his conviction was ignored; and that a letter he had sent to the police before the hearing of his case was not answered.
On the first point, the constitutional position is that it was for the court to decide on the evidence before it, whether or not the charge against Mr. Anderson was proved, and there is no power to order a re-trial of his case. The legal remedy open to anyone who is dissatisfied with a court's decision is to appeal to a superior court; in this case to quarter sessions, and a person who has insufficient means to do so may apply to the court for legal aid. Notice of appeal should normally be given within 14 days of the date of conviction, but it may be given


later by leave of quarter sessions. This, however, is entirely a matter for Mr. Anderson to decide.
On the second point, the court records show that a letter was received from Mr. Anderson on 26th or 27th July, 1966, but the clerk to the justices is unable to say what the contents of this letter were or what reply was sent to it. It seems likely that the letter from Mr. Anderson was a request for further time in which to pay his fine because the court records show that he continued to pay his fine by instalments beyond the 14 days that he was originally allowed by the court. I understand from my right hon. Friend the Home Secretary that there are no grounds which could justify him taking the matter further.
The police have no record of receiving any correspondence from Mr. Anderson following his accident, but a certificate of posting produced by Mr. Anderson has enabled them to confirm that a letter from Mr. Anderson was delivered to them on 21st March, 1966 and signed for by a police officer. Unfortunately, they have been unable to trace this letter. They have, however, obtained a copy of a letter that Mr. Anderson wrote to the clerk to

the justices on 4th July, 1966, in which he quotes the text of a letter that he wrote to the police on 19th March, 1966—that is to say, apparently the letter received by the police on 21st March, 1966. In that letter Mr. Anderson asked for the hearing of his case to be adjourned to enable him to prepare a defence, and said that there were disturbing features which he would have to raise in court.
The chief constable, now having seen a copy of the letter, is of the opinion that there is nothing in it that would have affected the decision to prosecute. Responsibility for the investigation of complaints against the police rests entirely with the chief officer of police concerned, in this case, the Chief Constable of Lancashire. He has had inquiries made into Mr. Anderson's complaint, but has decided to take no action on it. I hope that this will allay Mr. Anderson's sense of grievance. If he still feels aggrieved about his trial, he can still apply to quarter sessions for leave to appeal. I am sure that my hon. and learned Friend could give him good advice on that issue.

Question put and agreed to.

Adjourned accordingly at five minutes to Twelve o'clock.